Owning a business comes with responsibilities. These responsibilities include paying the bills. Occasionally, a business owner may forget a payment or an unexpected event keeps them away from their desk, and a bill ends up past due. While it is not something you want to make a habit of, you are not alone.
Many insurance companies include grace periods for situations like these on their policies.
A grace period is an additional time you have to pay your insurance premiums after a policy expires. When you pay within the grace period, you can still renew the insurance policy with no break in coverage.
Does every policy have a grace period?
No. Insurance companies are not required to offer grace periods. Some insurance companies include it as a benefit to choosing their policy.
Every insurance company is different. Depending on your company and policy type, the grace period can be 24 hours up to 30 days. There is also a chance your insurance policy offers two kinds of grace periods. The first is a shorter timeframe with no late fee. The second is a more extended timeframe with a late fee charge.
It is crucial that you read your insurance policy to know exactly how much time you have and how much you owe in the event of a missed payment.
If your grace period comes to an end before you pay your premium, you will not have insurance coverage. If a loss occurs after your grace period, your business will be responsible for paying the damage costs out of pocket.
Contact CoverWallet or your insurance company as soon as possible to find out what steps you can take to purchase business insurance. Some carriers may refuse to work with you and others may require you to complete all new insurance applications. Some may require you to sign up for automatic withdrawal payments to assure they receive payment on time.
When you purchase a business insurance policy, review it to make sure you understand the grace period offered. This is extremely important in the event of a mistake or oversight when paying your bills.
Insurance companies don’t offer grace periods so you can pay late every month or at renewal time. It is an added benefit. Abusing the privilege can result in a negative impact on your insurance costs and some companies can cancel your coverage as a result.
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