Failed car insurance payment – what are the consequences?

Missing a payment deadline is an easy mistake to make. Maybe you forgot to set a reminder or there weren’t enough funds in your account to cover the payment. It could even be a computer glitch and the payment fails to process through no fault of your own.

But what are the consequences if you miss a car insurance payment?

Missing a payment deadline is an easy mistake to make. Maybe you forgot to set a reminder or there weren’t enough funds in your account to cover the payment. It could even be a computer glitch and the payment fails to process through no fault of your own.

But what are the consequences if you miss a car insurance payment?

Julie Daniels
Insurance expert
3
minute read
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Last Updated 13 MAY 2022

Paying for car insurance 

Whether you pay for your car insurance annually or bi-annually with a one-off payment or monthly by direct debit, missing your payment can have serious consequences. We look at what happens if you miss a payment using either of these methods.

Did my car insurance payment go through or not? 

Although paying car insurance online is convenient, technology has a nasty habit of sometimes letting us down.

If you’re making your annual payment online and have gone through the payment process only to end up staring at a blank screen, or not getting confirmation that it was successful, how do you know if the payment’s gone through? These are our tips: 

  • Check if a payment has left your account – you can do this by looking at your online banking or requesting a mini statement at an ATM.
  • Contact your insurance provider – they’ll be able to check your account to see if a payment has been received. If the payment failed, you could fix it straight away.

What happens if I miss a direct debit car insurance payment? 

If you’re paying for your car insurance monthly by direct debit and there isn’t enough money in your account to cover a payment, it will bounce. This is sometimes called a returned direct debit. 

The bank will make two attempts to make the payment on the day it’s due – the first in the morning and the second at 2pm – so you have some time to pay the money into your account. If the second attempt doesn’t work, your bank may charge you for a missed payment.

If you know you’ve missed or are going to miss a direct debit payment, you should contact your insurance provider right away. 

Depending on what your provider allows, you might be able to: 

  • Make a separate payment online, but let your bank know if you do to save yourself paying twice.
  • Get an extension on your payment date.
  • Spread the cost of the payment by paying in instalments. 

The golden rule is to speak to your insurance provider directly and as soon as possible.

What happens if I miss or fail to make a car insurance payment? 

If you missed a payment or it fails to go through and you ignore it, the consequences could be serious: 

  • You could be charged late or failed payment fees by your insurance provider, as well as missed payment fees from your bank if your direct debit bounces.
  • Your insurance provider can cancel your policy. This means that your car isn’t insured and you’re not insured to drive it.
  • Missed payments can stay on your credit report for up to six years. This could bring down your credit score, which can make getting a loan, credit card or mortgage.

Your provider might give you further chances to make your payment before cancelling your policy, but this isn’t guaranteed.

Remember, if your policy is cancelled, whatever you do, don’t drive. It’s illegal and the penalties are high.

What if I know I can’t afford the next payment?

If you can’t afford the next instalment, contact your insurance provider as soon as you can – they may be able to arrange an alternative payment date for when you can afford it.

To prevent any payment problems in the first place, see if you can arrange your direct debit to go out on a more suitable date (for example, straight after your salary goes into your account). You could ask your provider if they can send a text or email alert as a reminder.

If you have debt problems, MoneyHelper can help you find free debt advice.

Also see our tips on how to get out of debt.

Where can I find cheap car insurance?

We’re here to help you find affordable car insurance. But remember, the cheapest car insurance isn’t always the best car insurance for you. Make sure you find a policy that suits your needs as well as your budget.

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