Do home insurance companies offer a grace period for paying my policy premium?

Most types of insurance, including homeowners insurance, have a grace period for your premiums. The period varies from one insurer to another, and may be as little as 10 days or as high as 45. As long as you bring your premiums up to current during the grace period, your insurance will not lapse or be canceled.

The grace period for your homeowners policy will be listed in the policy. If you cannot find where the period is specified, contact your insurance company and ask them. If you discover that you will not able to make a scheduled premium on time, talk to your insurance company and ask them if you can extend the period. Some companies will be happy to work with you, and others will not.

Home insurance is similar to auto insurance, where grace periods are concerned. Both types of policies have a high claims rate, and the insurance company is still liable for claims made during the late payment period. Because of this liability, insurance companies generally give very short grace periods to homeowners, limiting the late period to between 10 and 15 days. From the insurance point of view, every late day is another possibility of a major claim being filed.

You can also avoid late premiums by altering the payment schedule of your premiums. Pay for the full premium at once, if possible, or set up a schedule that fits within your income, such as paying monthly or quarterly rather than attempting to make a premium every month. You will get the best savings by paying an annual premium, because monthly premiums are typically increased by handling or other fees. Keep the fees low by keeping the number of payments to a minimum.

If your policy lapses, contact the insurance company immediately. In some cases, the insurer will be willing to extend coverage rather than lapse the policy. Once the lapse has occurred, you can usually get the coverage reinstated, at the expense of higher premiums. Insurance companies may also want to inspect the property before reinstated coverage, to make certain that it is still in the shape it was in when the policy was written.

Speak with your local insurance agent to find out the specifics of the company you're insured with.