by Amy Danise, Forbes Staff
Americans who are suffering financially due to COVID-19 may have relief coming for insurance payments. Many auto and homeowners insurance companies are making moves to offer financial assistance to customers, and some states are asking insurers to help out.
Typical grace periods are seven days for auto insurance and 31 days for life insurance, but can vary among companies and states. Late payments can result in your coverage lapsing or terminating. In some cases a policy can be reinstated by catching up with payments, but insurance companies are generally not obligated to reinstate coverage.
Efforts to ease the financial strain on policyholders are in the form of time extensions, not the forgiveness of the payments. If you use a longer grace period or are able to “skip” insurance payments, your total bill will still accumulate.
Auto and Homeowners Insurance Companies Offering Payment Help
Auto-Owners Insurance customers can call the company to discuss options such as changing their due date, changing their payment plan or getting a payment extension.
The Hanover/Citizens Insurance has put a 60-day hold on all cancellations due to non-payment for all customers unless a longer period is required by a specific state. Late fees will be waived.
Progressive is waiving late fees and will not cancel or non-renew policies due to non-payment through May 15, 2020. The company says they’re also providing payment leniency to customers who call and ask for it.
Travelers says it will not cancel or non-renew of coverage due to nonpayment through May 15, 2020. Travelers will not charge interest, late fees or penalties during this time.
Contact your insurance company if you want to know its options for financial assistance.
States Mandating Insurance Payment Extensions and Other Relief
Many states have asked or ordered auto and homeowners insurance companies to provide flexibility to customers who are financially affected by COVID-19.
Extended Insurance Grace Periods Common in Times of Crisis
It’s not unusual for insurance companies to offer extended grace periods in times of crisis, but in the past it has been after natural disasters. For example, after last year’s wildfires in California, the state’s insurance department ordered all insurers to grant 60-day grace periods for customers in wildfire disaster areas. One of the main concerns was that insurance bills were lost or destroyed in the fires.
After the devastating flooding from Hurricane Harvey in 2017, the Texas insurance commissioner encouraged all insurers in the state to suspend premium payments.
Remember, extended grace periods and payment plans for insurance are helpful, but they don’t reduce what you owe.
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