The Consequences of A Missed Insurance Payment

A missed insurance payment can affect your insurance rate for up to 3 years.

In the chaos of day-to-day life, bills can pile up. It’s not that uncommon to forget about a bill payment or feel that end-of-the-month crunch and think about deferring. Choosing to forgo an auto insurance payment, however, is a different ballgame.

Unfortunately, missing even a single premium can cause you a lot of problems and missing more than one can really cause things to spiral out of your control. If you are – or think you might be – late with an insurance payment, call your provider immediately and see if they offer a grace period or can work with you to sort something else out.

Otherwise, you could face higher monthly payments and pesky NSF fees until you’ve paid. This affects your credit rating and could impact your policy renewal. You could also face cancellation of your policy altogether, which can really be a problem for Ontario drivers who rely on their vehicle.

Let’s take an in-depth look at what missed insurance payments can really mean for you:


Though your insurance provider might offer you a few days grace period to send some funds over, chances are if you’ve missed a payment, sooner or later you’ll be paying for it. Failing to pay your insurance can result in a surcharge or daily fee until your payment is made in full. The longer you wait to pay, the more you’ll be charged, so it’s best to address this as soon as possible. Unpaid instalments can also negatively impact your credit score and it can take years for that to reverse itself. As you’ll see below, these can be just the start of some serious consequences.


Unfortunately, missing one or more insurance payments can land you in the “high risk” category. For one thing, it can mean you’ll be stuck paying higher monthly costs. Based on this designation, your current insurer may choose to increase your premium when it’s time to renew your policy, or decide not to renew it at all.

In the event that you find yourself shopping for another insurance provider, it can also mean that you’re less likely to get coverage from new provider. In today’s market, many insurers will not insure clients with missed payments. Missed payments can stay on your record for up to ten years.


This is the most extreme possibility, but it can and does happen. In Ontario, a cancellation of your policy can have grave consequences. Why? Ontario has compulsory auto insurance, therefore, every vehicle driven in the province requires insurance. Without valid insurance, driving your vehicle becomes illegal and you can face serious consequences if you violate this. If you’re stopped by law enforcement and can’t show proof of insurance – or don’t have coverage at all – you could be fined. A fine can cost you anywhere from $5,000 to $25,000. You may also face vehicle or license suspension of up to a year.

In itself this can cause a lot of problems, especially if you rely on a vehicle to get to work, run errands or transport family members. Naturally, you will face even more serious penalties if you are a high risk driver or have other driving-related offences on your record.

Lastly, without valid insurance, you are not protected in the event of an incident. This can lead to much bigger problems. If you damage another vehicle, a person or someone’s property while in your car and don’t have auto insurance, you’re more likely to face jail time.


A missed insurance payment can be a major inconvenience. With a bit of planning, you can ensure you never have to deal with this. Here are some tips:

  • Schedule automatic withdrawals, so you never have to worry about manually arranging payments
  • Pay from an account you use often –  having to transfer money into a different or infrequently used account is a common reason people miss payments
  • Sign up for text or email reminders from your insurance provider
  • Use an insurance broker to shop around for lower rates – especially, if you’re feeling the crunch when it comes time for monthly expenses

Just like with credit card or utility payments, forgetting one payment can cost you more money. A missed insurance payment can also affect your credit rating long-term and cause inconveniences in your day-to- day life.

Make sure you keep on top of your finances to avoid financial penalties or suspension of your auto insurance.


Mass Insurance Brokers

59 Main Street, North Markham, Ontario, L3P 1X7

Monday to Friday 9am to 5pm