Grace Period
A grace period in insurance keeps your coverage from lapsing even if you're a couple of days late on your premium payments. The grace period for car insurance varies depending on your policy and the auto insurance company you are with, but in general auto insurance grace periods range from 24 hours to 10 days.
Free Auto Insurance Comparison
Secured with SHA-256 Encryption
UPDATED: Oct 30, 2020
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
The grace period of an insurance contract is there to give policy holders a little additional peace of mind if they find that through whatever circumstances they are unable to pay an installment of their premium. This can apply to auto insurance policies as well as other common forms of insurance such as life insurance, home owners insurance, etc.
Essentially the grace period of an insurance contract will be defined in an insurance contract and this is the period that an insurer will allow your coverage to run for without you making a payment.
What is the length of a grace period in auto insurance?
The length of the grace period for your auto insurance will vary depending on the terms of your individual contract and also the insurer that your policy is with. The grace period can be very short, as little as 24 hours and it can be much longer in fact some policies allow for 30 days.
If you are uncertain of the grace period on your auto insurance policy, you should check the contract and if that doesn’t help then you should contact your insurance broker, agent or broker-agent for clarification.
Compare over 200 auto insurance companies at once!
Secured with SHA-256 Encryption
Are there financial penalties for utilizing a grace period in my insurance contract?
Some insurers state in the contract that there will be no financial penalty for using a grace period extension; others level a charge against the contract holder. The only way to know whether your insurer levies a charge or not is to review your own insurance contract or contact your agent, broker or broker-agent for assistance.
Here is an example of how a grace period might function
David has auto insurance and needs to make a payment on the first of every month of $100, for his insurance. This month his paycheck is late and he won’t be able to pay until the 10th of the month. As soon as he realizes this, he contact his insurance broker and asks what he can do as he doesn’t want to lose his coverage.
The agent checks David’s policy and informs him that his contract offers a fifteen day grace period but there will be an extra charge of $10 when he makes the next payment for using the grace period, but his insurance will remain in place for the whole time as long as he makes his payment on the 10th of that month.
Additional Grace Period Definitions
- About.com
- Investopedia