Whatever the reason, a failure to pay your insurance premium may result in the termination of the contract by your auto insurer. In addition to finding yourself without auto insurance, you will then be labeled a « bad payer » by insurers. Finding a new company to cover you can then become a real obstacle course. Fortunately, you can limit this hassle by purchasing bad payer auto insurance. We explain to you.
How do you become a bad payer for auto insurers?
The insurer and the insured are both bound by a contract which, like any other, requires each party to meet a number of obligations. Overall, the insured has a duty to pay his contributions on time, while the insurer has to offer him coverage in the event of a claim.
What is the procedure for non-payment of auto insurance?
If the insured does not honor his part of the contract, the insurer then automatically initiates the procedure for terminating the contract for non-payment. It follows three main steps:
- The formal notice after 10 days of non-payment;
- The suspension of guarantees after 40 days;
- Final termination after 10 days following the suspension of guarantees.
Bad payer : a statute made public
Each insurer has a statement of its clients which contains the following important information:
- History of claims;
- The dates of validity of the contract;
- The bonus-malus;
In the event of termination of the contract due to non-payment of contributions, the information is automatically entered on the statement and any new insurer is informed of the contractor’s situation. You are then considered as a bad payer, a risk profile for insurers.
In addition, the names of people whose contract has been terminated for default of payment are automatically entered in the AGIRA file (Association for the Management of Automobile Risk Information). This file is consulted by insurance companies before signing any new contract. To be deleted from this file, you must pay the amount due to the company.
How to find and choose auto insurance for bad payer?
If you believe that the decision to terminate the contract is not justified, you can take legal action against the insurance company. However, this solution is not really recommended, because the procedures are very long and expensive. In addition, you will not benefit from any guarantees until the court renders its decision.
Bad payer insurance: the best solution
From the moment you become a deadbeat for auto insurers, the best solution available to you is to look for a deadbeat auto insurance policy. Some insurance companies indeed offer specific contracts for these profiles. You can easily find one by doing a quick internet search.
The ideal is to move towards this solution as quickly as possible, because the longer the period of interruption of insurance, the higher the rates applied by the new insurer may be.
Our advice for choosing your car insurance for bad debtors
Auto insurers who offer contracts for bad payers mainly take into account the reasons for terminating the previous contract and the applicant’s current creditworthiness.
Overall, the prices charged are significantly higher than those offered for traditional profiles. In order to get the best prices, do not hesitate to compete by using an online insurance comparator.
If you chain several refusals, you have the option of lodging an appeal with the Central Pricing Bureau. This organization may require an insurer to cover you with a third party auto insurance contract. But the amount of contributions will be taxed on you.
On the other hand, if it is financial problems that have led to a default, it is recommended that you opt for an insurance policy that is less expensive than the one that has been canceled in order to fit into your budget and avoid further trouble.