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August 18th, 2016 by


Unless you benefit from a period of grace, if you have not paid your car insurance premium, you are not covered for that month. We explain why below. 

Times are tough economically and this can directly impact our car insurance premium payments.

“There was a rise in the average number of outstanding debtors’ days, to 53.5 days in the second quarter, from 52.5 in the first quarter.

“This shows an undeniable trend of rising financial strain,” says Michelle Beetar, Managing Director of Experian South Africa.

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car insurance claim

In other words, sometimes, there simply isn’t money in the bank account to pay our car insurance premiums and other debit orders.

However, the Ombud for Short Term Insurance warns that where cover wasn’t paid for a specific month, no cover is in place. If you then claim the car insurance company will have a strong case to reject the claim. But there is normally a period of grace allowed, depending on what it says in your policy booklet.

They explain your rights and risks when you can’t make a payment on your premium.

claim if car insurance premium not paid

Consumers firstly need to understand the period of grace 

The Policyholder Protection Rules (‘PPR’) have introduced a safeguard to give consumers who fail to pay a premium a chance to pay. This is what you need to know about the rules for the period of grace.

  • The grace period may be 15 days or more after the agreed payment date but not less
  • Read your policy wording to see if the period of grace applies
  • The grace period applies from the second month after the policy starts
  • If the policy wording states that the premium may only be paid by debit order, the policy must explain how the premium must be paid during the grace period
  • However, where the policy wording does not set out the method of payment, then the insurer cannot refuse an offer by the consumer to pay the premium directly into the insurer’s bank account during the grace period
  • During the sales call, the period of grace will be explained.
  • If the insurer says they will double debit you in case of non-payment, the next month, it means that they are allowing one month’s grace period

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rejected car insurance claim

General principles where no grace period is allowed:

  • If no premium has been paid for a specific month, then there is no cover for that month
  • It is your responsibility to have sufficient funds to cover the deduction of the premium payment
  • The insurer does not need to notify you of a non-payment of the premium
  • Most policies contain an exclusion against cover if the consumer places a ‘stop payment’ on the premium
  • A stop payment is regarded as a cancellation of the policy by the consumer
  • Premiums are paid in advance, in other words, on the first day of June for cover to apply for the duration of June

If you are unsure, it is best to chat directly to your broker or insurance company. They will inform you about what you can do if you need to miss a payment.

Need to compare car insurance companies? Let us help you!

  • Julian Burger

    If a payment is missed for whatever reason, I feel that it is business ethics towards a customer for the company to inform them about it. Surely most times this do not happen intentionally and good customers expect some sort of recognition of a company that they are loyal to especially in todays environment where it is quite easy to change your service provider instantly

    • Frances Bailey

      I couldn’t agree more Julian. I suppose banks are quite helpful with sms alerts when a debit order doesn’t go through, and certainly brokers will often help in this regard, but it would be good practice for insurance companies across the board to send out non-payment alerts as well. They are certainly fighting hard to retain business, and with customers becoming the centre of the insurance experience, it would make sense for them to make as many provisions as possible to guarantee their customer’s well-being. I think the point, however, is that customers also need to do their bit in being responsible about their insurance contracts. It is often difficult with so much financial burden on our shoulders, however.