We never think it will happen to us. There I was, my 5-year old self (I was a pretty good kid then), sitting at the counter eating the standard babysitter dinner of mac and cheese, rocking back and forth on my stool. Our teenage neighbor, Tracy, was babysitting while our parents enjoyed an evening away. Tracy told me to stop because I could fall and bust my head open. But, I was 5 and I’m sure my brother was laughing and watching while I proved that I was a pretty cool big sister. I would stop, and when she wasn’t looking, I would do it again. Since I used to blame everything on my brother when we were kids (and I sometimes still do), I could possibly blame him for it happening. If he hadn’t been thoroughly impressed with my balancing skills, I’m sure I would have stopped. I was warned, I didn’t think it would happen. But, it did… I fell over backwards, “busted my head open” and ended up at the doctor’s office getting two stitches. Almost 40 something years later (where did the time go?), I still remember this happening and when I see a kid rocking back and forth, I am very adamant that they stop. Sometimes they listen, sometimes they don’t.
It’s kind of like that so called “grace period” on your auto policy, sometimes nothing happens, but sometimes it does. We hear this phrase often, “Well, I have a grace period” so I thought I would explain and possibly end some confusion. Here is how this conversation often goes….
Ring, Ring, Ring...
Client – What day is my auto insurance due?
Me – It is due on the 15th.
Client – Well, I can’t pay it until the 18th.
Me – Ok, but I can’t guarantee that there will be coverage those couple of days.
Client – But, I have a 10-day grace period.
Me – The grace period is to reinstate your policy.
Client – And I’ll have coverage then, right?
Me – Yes, but if you haven’t paid for the coverage during those couple of days, the insurance company doesn’t have to cover you in the event of a claim.
Client – But, it’s a grace period.
Me – I can’t authorize the late payment being ok so I suggest you call directly in to the company since they are the only ones that can guarantee coverage without payment.
Client – I'm sure I'll be fine.
What Your Grace Period Covers
Here is the wording from a few different companies contracts that are sent out every renewal – “If a required premium is not paid when due, or by the end of any grace period if we agree to grant a grace period, this policy will lapse as of the due date”, “The insured should pay the premium directly to the Company before the expiration date to avoid a lapse in coverage” and also, “Your failure to pay the required premium means that you have declined our offer”.
Think of your invoice as how you would deal with a landscaping bill. If you have an outstanding bill, they are not going to care for your yard UNTIL you have paid. Once paid, they will come out and make sure that everything looks nice again.
“But, the cancellation notice is giving me 10 days until they cancel my policy.” Be very careful with the wording on your invoice. This could be to reinstate coverage with or without a lapse. It is very common on renewal invoices for it to plainly state that if payment is not received BY the due date, the policy is canceled.
It’s Not a Requirement, It’s a Perk
A grace period on your insurance policy is not a requirement in the state of Florida, it is a perk. It is there to help you in the event of an emergency, not as an additional due date. Rating tiers on your policies are also affected by how often you are late and how many times your policy is reinstated, even if by only one day.
So, do me a favor, please do not rely on a possible grace period because not all companies truly offer them. At the time of loss is not the time to find out your companies view point on these tricky things. Also, if you see a kid on a stool rocking back and forth, tell them to stop and do not take your eyes off of them. Kids are tricky little things, too.
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Niceville Insurance Agency has been proudly serving our local communities since 1995. Our specialty has been delivering insurance solutions for individuals, families, and businesses throughout Northwest Florida. Contact us for a no hassle insurance quote today!