Few things are as stressful as being unable to pay your bills on time or at all. Canada is in the throes of an economic downturn because of the COVID-19 pandemic. As a result, many Canadians are undoubtedly feeling the financial pinch.
Money may be too tight to mention, but that won’t keep your monthly bills and financial obligations at bay. That may mean you’re in an uncomfortable position, especially if you miss a payment on your home, condominium, or auto insurance.
A recent Leger survey asking Canadians for their views on the coronavirus pandemic and its impacts on our financial wellbeing illustrates the concerns many of us share, including:
Not paying your auto insurance premium on time can lead to problems, especially if you do nothing about managing the situation. So, don’t shrug it off and wait to see what happens. Immediately call your insurer or broker and give them a heads-up you’re in a pickle. You may find it encouraging to know many insurance companies are being flexible by adapting their business practices to help their customers in these trying times.
For instance, if the province you live in has declared a state of emergency like in Ontario and Alberta, many insurers are forgiving their policyholders for missing a car insurance payment. Some are allowing their customers to defer their monthly premium payments and are spreading them out over the rest of the year, as well as waiving any non-sufficient fund (NSF) fees. Others are extending their grace periods for renewals and payment dates.
It’s important to know that if you miss more than one payment, it may reap significant consequences. Having a history of non-payments may result in a few repercussions such as:
If you’ve been laid off from work or your hours are reduced because of the COVID-19 lockdown and are worried about paying your car insurance bill, there are things you can do to mitigate the situation. For example, since you’re not driving as often as you usually would if at all, consider suspending or reducing your auto insurance coverage until things turn around.
Missing a home insurance payment can also produce unpleasant outcomes. Indeed, you are not legally required to have home insurance in either Ontario or Alberta, but most mortgage lenders require you to have it. On that note, many mortgage lenders are offering deferrals on their mortgage payments for homeowners affected by COVID-19.
Home insurance providers are also making efforts to assist their policyholders facing difficulties paying their monthly premiums. Some are offering flexibility on scheduled billing dates to give you extra time to pay. Other insurers may temporarily suspend policy terminations and NSF fees for missing payments, as well as defer policy renewal dates. The key is you need to proactively reach out to your home insurer to find out the options available to you.
However, if you miss multiple home insurance payments, your policy may be terminated. Should that happen, getting a new home insurance policy at a low rate will be tough. You could be labelled a high risk, meaning insurers may not extend coverage to you, or if they do, you may face having to pay a higher premium. If you are unable to pay your monthly home insurance premium, contact your provider or broker and find out what options you have to work through the problem.
Outside of communicating the difficulties you face directly to your insurer, if you are worried about making your home, condo, or tenant insurance or car insurance policy payments on time, here are a few additional things you can do: