Why is it important to pay bills on time?
Paying your bills on time is a matter of individual responsibility, the same as living within one's
means. It affects your ability to obtain credit, the interest rates you pay, perhaps even debt levels
and it can even help you reduce your insurance rates.
What are the consequences if I don't pay my insurance bill on time?
The first consequence is generally a late fee. This is charged by the company in part to cover the
additional costs of sending cancellation and reinstatement notices out. It is also a deterrent to paying
late.
The next, and more serious consequence is that you may not be covered for a loss. If your policy is
cancelled for non-payment, you do not have coverage in force. Insurance companies will not back
date to cover a claim or loss that you've had if you suffer a claim after your policy has cancelled.
Perhaps it is obvious why, but if not, it is suffice to say that insurance companies would not generate
enough premium to pay the claims of people who bought insurance only after they had a claim.
Although it may have just been a short time since your coverage lapsed, the same principal still
applies to policies that have cancelled for non-payment.
How else does paying my insurance bill on time matter?
It can lower your insurance costs in two ways. First, it is important to maintain continuous coverage
(with out a lapse) in many cases to qualify for a payment plan, the best rate or even to qualify for
coverage.
Next, personal insurance policies provide discounts for having a good payment history and/or credit
history. These discounts can be significant as they are based on real actuarial data - meaning claims.
People or businesses that are responsible managers of their money also tend to be more responsible
in other areas, including protecting their property, conducting business safely, implementing
procedures or protections that will reduce claims, etc. As a result, these same people and businesses
have or make fewer claims on their insurance. Much of this cause and effect can be seen very
clearly in the statistics and actuarial work conducted by insurance companies. In fact, some claim
that it is one of the best predictors of claims experience on the aggregate.
There is even one more added advantage called a paid in full discount. Many companies now offer
some form of paid in full discounts for many policy types as once again, they've found that customers
who pay in full also tend to have fewer claims.
These explanations are intended to provide a simple understanding of some of the basic provisions
found in most insurance policies. Sometimes simple explanations do not address all of the particular
circumstances of a claim, nor may they take into consideration case law or other provisions within a
policy. This FAQ section of the website does not replace, alter or amend any language in your policy, its
terms, conditions or exclusions.
Paying your bills on time is a matter of individual responsibility, the same as living within one's
means. It affects your ability to obtain credit, the interest rates you pay, perhaps even debt levels
and it can even help you reduce your insurance rates.
What are the consequences if I don't pay my insurance bill on time?
The first consequence is generally a late fee. This is charged by the company in part to cover the
additional costs of sending cancellation and reinstatement notices out. It is also a deterrent to paying
late.
The next, and more serious consequence is that you may not be covered for a loss. If your policy is
cancelled for non-payment, you do not have coverage in force. Insurance companies will not back
date to cover a claim or loss that you've had if you suffer a claim after your policy has cancelled.
Perhaps it is obvious why, but if not, it is suffice to say that insurance companies would not generate
enough premium to pay the claims of people who bought insurance only after they had a claim.
Although it may have just been a short time since your coverage lapsed, the same principal still
applies to policies that have cancelled for non-payment.
How else does paying my insurance bill on time matter?
It can lower your insurance costs in two ways. First, it is important to maintain continuous coverage
(with out a lapse) in many cases to qualify for a payment plan, the best rate or even to qualify for
coverage.
Next, personal insurance policies provide discounts for having a good payment history and/or credit
history. These discounts can be significant as they are based on real actuarial data - meaning claims.
People or businesses that are responsible managers of their money also tend to be more responsible
in other areas, including protecting their property, conducting business safely, implementing
procedures or protections that will reduce claims, etc. As a result, these same people and businesses
have or make fewer claims on their insurance. Much of this cause and effect can be seen very
clearly in the statistics and actuarial work conducted by insurance companies. In fact, some claim
that it is one of the best predictors of claims experience on the aggregate.
There is even one more added advantage called a paid in full discount. Many companies now offer
some form of paid in full discounts for many policy types as once again, they've found that customers
who pay in full also tend to have fewer claims.
These explanations are intended to provide a simple understanding of some of the basic provisions
found in most insurance policies. Sometimes simple explanations do not address all of the particular
circumstances of a claim, nor may they take into consideration case law or other provisions within a
policy. This FAQ section of the website does not replace, alter or amend any language in your policy, its
terms, conditions or exclusions.
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| 1700 E BELTLINE AVE NE, SUITE 120, GRAND RAPIDS, MI 49525-7044 |
| PROACTIVE | KNOWLEDGEABLE | RESULTS |
Paying bills on
time is a
matter of
personal
responsibility..
.
time is a
matter of
personal
responsibility..
.
| _Frequent Questions |
Automobile
What is the Michigan
Catastrophic Claims
Association (MCCA)?
Bills
Why is it important to pay
my bill on time?
Claims
What if I don't replace my
property, does the
insurance company still pay
replacement cost?
Should I have my car
windshield repaired or
replaced?
What do I have to do to
have my claim paid? What
are my responsibilities
during a claim?
General
Why do insurance
companies use insurance
score discounts? Is it fair?
Property
Why is my replacement cost
more than my home or
building is worth?