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What happens if you've skipped an insurance payment and you're in an accident?

28 October 2020 8:25 PM
Tags:
The Money Show
Bruce Whitfield
Insurance
Insurance payments
Insurance premiums
Wendy Knowler
insurance policy
short-term insurance
Policyholder Protection Rules
missed insurance payments
Ombudsman for Short-Term Insurance

A policy holder has an automatic 15-day grace period. Make sure you know how it works, warns consumer ninja Wendy Knowler.
Man makes phone call after car accident, insurance. Image: 123rf

Will your insurance company pay out if you're in an accident or your car is stolen after you've missed a premium payment?

RELATED: Got a vehicle tracker? There’s a clever new scam - thieves are stealing cars

The Policyholder Protection Rules specify that an insurer must give a policy holder written notice that it hasn't received the premium within 15 days of becoming aware of the non-payment.

From the second month your policy is in effect, your insurer must also give you a grace period of at least 15 days after the due date in which to make payment. During this time the policy does not lapse.

RELATED: Why it's a bad idea to ditch or downgrade your car insurance to save on costs

Follow the advice from the The Ombudsman for Short-Term Insurance and check what your policy says about missed payments, says Wendy Knowler.

There might be a special plan that your particular insurers have come up with... If you don't read up on that you could fall foul of it.

Wendy Knowler, Consumer journalist

Some insurers will give you up to 30 days' grace but the minimum is 15.

Wendy Knowler, Consumer journalist

It could be a case that you've just switched banks... and you think you've paid but you haven't.

Wendy Knowler, Consumer journalist

Another possible pitfall is that the due date of the premium and your debit order date aren't the same.

Knowler discusses an example of a policy holder whose timing caught her out badly.

She had a car accident on the 12th of June... it was a write-off... MiWay repudiated her claim because when they tried to deduct via debit order her premium on the 25th of May it was returned unpaid... On the tenth of June, which takes you to the 15 days, it was again returned...

Wendy Knowler, Consumer journalist

As it happened, the insurer responded positively when Knowler took up this client's case, but she was lucky.

Listen to the ins and outs of missed payment scenarios below:


This article first appeared on 702 : What happens if you've skipped an insurance payment and you're in an accident?


28 October 2020 8:25 PM
Tags:
The Money Show
Bruce Whitfield
Insurance
Insurance payments
Insurance premiums
Wendy Knowler
insurance policy
short-term insurance
Policyholder Protection Rules
missed insurance payments
Ombudsman for Short-Term Insurance

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