As the COVID-19 lockdown extends in the near future, drivers and homeowners may be concerned about their financial resources during a financial downturn. That may leave you with difficult choices about what expenses you can pay on schedule and what you can’t. Among those worries, what happens if you miss your home insurance or auto insurance repayments?
These are challenging times for most Canadians. The coronavirus pandemic has changed our usual pattern of life, in addition to the economic climate of our country. Leger’s current survey of the impact of COVID-19 finds 65% of Canadians think the most terrifying has yet to be discovered. In addition, 45% experienced a decline in income, and 22% thought they would have a hard time paying their home loan or rent.
As far as your insurance costs go, under normal circumstances you may face consequences if you are unable to pay them on schedule. Missing more than one payment can have a bigger impact. But the good news here: however we are stuck in an extraordinary situation, many insurance providers aim to offer benefits to customers who are having a hard time getting their resettled.
For example, if the district you live in has declared a certain emergency situation, some companies allow their customers to forfeit payments and will distribute them to the current year’s balance while ignoring insufficient funds (NSF) fees. Others will not terminate your coverage if you actually miss a payment because you gave up your job, or they extend the duration of their grace for revival and payday. Check with your insurance provider or broker to find out what your options are.
What Happens If I Miss My Car Insurance Payment Due to COVID-19?
Usually, if you lose some resettlement production on your auto insurance premium, your auto insurance coverage will be terminated. But before doing this, your insurance company is bound to warn you of missed payments and inform you of the activities they plan to do. Your best option is to be positive. Contact your insurance provider or broker before you lose your payment to let them know that you are facing financial problems. Many insurance providers will deal with their customers to provide a variety of payment options.
In Ontario, the Monetary Solutions Regulatory Authority (FSRA) Consumer Rights Issue Car Insurance stipulates that you can keep your auto plan in place for up to thirty days “following some insufficient cash (NSF) circumstances”. However, the entitlement fee also dictates that you have to pay your premium quickly. However, if you are unable to pay within the stipulated time, your car insurance will be terminated. You may face NSF fees, and you will not be allowed to own your car (it is against the law to own any vehicle in Canada without car insurance).
In Alberta, the provincial Customer Rights Issue describes your securities when purchasing a product or signing an agreement. As much as the loss of monthly auto insurance resettlement goes, Albertans face a comparable impact to Ontarians.
If you have a non-paying auto insurance background, that might complicate matters. First, if you have a background in skipping resettlement, you may be classified as a high-risk driver by all insurance providers, which makes obtaining a premium reduction more challenging. You could have problems getting insurance from various other companies. Second, non-payment documents may remain in your insurance records for up to 3 years. If you don’t pay by a certain day, your insurance provider may send it to your collection company, which can affect your credit rating.
You can take steps to cancel your car plan, but that can cost you over time as some insurance providers may charge you a small fee for canceling prematurely. In addition, if there is room in your coverage, it can affect your driver’s score and price. A better way to go might involve suspending or reducing your auto insurance coverage until the points perk and you are in a stronger monetary position.
What Happens If I Miss My Home Insurance Payment Due to COVID-19?
Unlike auto insurance, you are not legally required to have home insurance in Ontario or Alberta. Because of this, most home loan lenders require that homebuyers have insurance to protect their residential or commercial homes and homes – buying a home or condo is, besides, one of the biggest monetary dedications you will make in your lifetime. Leaving your important belongings without insurance is not a smart idea.
If you’re concerned that you might not be able to pay your monthly home insurance premiums on schedule, be warned: some home, condo, and renters insurers delay resettlement and layoffs for non-payment. However, not all insurance providers take such action. Be sure to contact your provider before you lose your production payment and find out how they will help you.
However, skipping some home insurance resettlement and actually stopping your plan makes things bleak. It can be scary to get new home insurance coverage if your current plan is terminated due to some non-payment. Insurance providers may not extend coverage to you, or they may increase your rates if you are labeled as high risk.
What to Do If You Will Lose Your Payment for Your Home or Car Insurance
If you think you may be missing out on payments for your home, condo, or renters insurance coverage or auto insurance coverage, consider taking the following actions:
- Contact your Insurance Company or Broker. This should be the first point you make. Don’t sit still and hope that there’s no notification you missed a payment. Contact your insurance provider or broker in advance to discuss what your challenges are and ask about setting up payment options. Some insurance providers may forgive you for missing a payment due to the COVID-19 lockdown and the effect it has on your financial resources.
- Contact your Monetary Organization. It may be helpful to contact your financial institution or cooperative lending institution to inquire about including overdraft protection for your account. That will give you a bit of a buffer if the payout day precedes the day the earnings are transferred directly to your account.
- Set Bookmark Notification on your Phone. We all depend on our mobile devices to sustain us in addition to our daily work. So, set payment instructions on your phone or email schedule to make sure you don’t miss a payment due date.
- Develop a Money Emergency situation. If possible, set aside money to ensure you have sufficient funds for scheduled insurance resettlement.