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What Happens if You Miss an Insurance Payment?

Monday, 20 April 2020

Life takes unexpected turns and oftentimes our finances are affected. Especially in the current situation with COVID-19 and the resulting economic downturn, you may be in a situation where you must prioritize which payments you make on time and which ones you simply can’t. In the wake of these tough decisions, it’s important to consider the potential consequences and how your insurance company will treat the situation. While we discuss what happens if you miss an insurance payment, one of the first steps is to speak directly with your broker or agent to get information specific to your insurer.


What Should You Do if You Think You Will Miss an Insurance Payment?

It’s important to note that funds must be available in your account at 12:01am on the date of your scheduled payment. If the situation arises where you believe you might miss an insurance payment on your home, condo, tenant or auto insurance policy, you should be proactive in taking these steps:

Contact your broker or insurer before you miss the payment. If you are facing financial challenges, many companies will work to provide alternate payment options for their customers, especially if the financial hardship is related to COVID-19.

Here are a few solutions a company might offer if you are proactive:

  1. Some insurance companies will allow their customer to change the payment date as a one-time exception to adjust to unexpected circumstances.
  2. Insurers may also allow all payment dates to be shifted to another date going forward to accommodate new employment/pay dates.
  3. Other insurers might offer that you make a credit card payment in advance of your payment date to avoid NSF charges on your bank and insurance balance.
  4. Some companies may forgive you for missing one payment because of the Coronavirus lockdown and its effect on your income.

Contact Your Financial Institution. Your bank or credit union might be able to offer you overdraft protection on your account, which will give you a bit of buffer time if a payment date precedes a scheduled income deposit.

Set Reminder Notices on Your Phone. Mobile devices and calendars are helpful in keeping us on track with daily tasks. Set up a recurring notification in your phone or email calendar to remind you of upcoming payments so that you won’t miss deadlines.

Build an Emergency Fund. If it’s possible, set aside money to ensure you have enough funds for scheduled insurance payments in these types of situations.

What Happens If You Miss an Insurance Payment?

Here's what happens if you miss an insurance payment: Your insurer is obligated to notify you of the missed payment (either by registered mail or through your brokerage). If alternate arrangements suggested above are not made and you do end up missing your payment, your insurer or brokerage will contact you with next steps. Here are a few potential approaches that companies may require to resolve the missed payment:

  • Some companies will set up an automatic re-attempt of the payment within a certain number of business days determined by the insurer
  • Some will allow the insured to make up the payment via credit card or certified funds
  • Others will postpone the amount to the next payment date resulting in a double-payment
  • Insurers may also divide the missed payment equally among the rest payments during the policy term

Be sure to speak to your broker or insurance company to find out how they handle missed payments and follow their instructions directly.

What Happens If You Miss Multiple Insurance Payments?

Missing multiple payments on auto or home insurance may result in your policy being at risk of cancellation by your insurer.

In the case of auto insurance, Ontario’s Financial Services Regulatory Authority’s (FSRA) Auto Insurance Consumers’ Bill of Rights says that the insured has the right to keep an auto policy for up to 30 days “following one or two non-sufficient fund (NSF) situations”.

You should, however, resolve any missed payments for home, tenant, condo or auto insurance as quickly as possible. If the amount owing is not received by the deadline given by your insurer, your insurance will be cancelled. You may also have to pay additional NSF fees. In the event of cancellation, this may affect your lease or mortgage agreements, and, in the case of auto insurance, you will no longer be able to drive your car as it is illegal to drive your vehicle in Canada without insurance. In any case, leaving your most important assets uninsured is never a good idea.

A history of cancellation for non-payment would mean that potential insurers will consider you high-risk and likely increase premiums. In addition, it can take up to three years for a non-payment will to be removed from your record. Insurance companies may send your outstanding balance to a collection agency if not received by the deadline they provide, which can adversely affect your credit score.

You may be thinking, “Why not just cancel my policy all together to avoid the missed payment?” Keep in mind that insurance companies can charge a penalty to cancelling before the end of your policy term and your future pricing and rating may also be affected by gaps in coverage showing in your insurance history. If possible, instead of cancelling your policy, ask your broker or insurer about suspending or reducing your coverage until your financial situation improves.

What Happens If You Miss an Insurance Payment due to COVID-19?

The good news is that many insurance companies are working to offer allowances for clients who are struggling to make their payments in these unique circumstances. Since the province of Ontario has declared a state of emergency, some companies will allow their clients to miss one payment and will spread it out over the balance of the year. NSF fees may also be waived in this case. Insurers may opt not to cancel your coverage if you missed a payment due to job loss. Some may also extend their grace periods for renewals and payment dates.

The Ontario government has also recently changed regulations to allow for insurance companies to offer rebates for up to 12 months from the declaration of the state of emergency. So, in addition to premium and payment relief measures already implemented, insurers may now offer to further assist clients affected by the pandemic.


The insurance industry is doing its best to be accommodating during this pandemic, but be sure to keep in mind the potential consequences of multiple missed payments. Have an open conversation with your broker or insurance company and they will be happy to discuss options that are available to you. At BIG, our billing team is available to take questions specific to your policy. If you think you might miss an insurance payment, be proactive by calling your broker, or emailing us at

By: Amy Legault