In Texas, what makes your parked car insurance policy active is the payment of a premium (which can be done monthly, semi-annually, or annually). A policyholder must pay a parked car insurance policy premium at an agreed date. If the policyholder pays the premium when due, the insurer will cover damages to the parked car (within the policy) at the time of occurrence.
If you have any questions about insurance coverage, speak with a Texas state-licensed insurance agent.
The premium of a parked car insurance policy in Texas is paid at the agreed date by the policyholder to the insurer.
The payment options you choose depend on whether you are going with automatic or manual payments.
Automatic payment - allows the insurance company to withdraw money directly from your bank account if the premium is due monthly, semi-annually, or annually. The majority of Texas insurance payments are made using an automatic payment. Payment options for automatic payments are:
Electronic Funds Transfer (EFT)
Manual payments - the policyholder initiates manual payments through money order, check, or cash and must ensure the insurer receives the payment before or on the due date. Be careful not to be late, otherwise you are entering the grace period timeline.
Whether you pay annually or monthly depends on your finances. Nonetheless, ensure you make payment when due to prevent your coverage from lapsing.
Annual payment is usually the less expensive option, because you get a discount for a full upfront payment. Paying annually can also save you from late fees you may incur for paying late. It also keeps your insurance plan from being canceled because you missed a payment.
Monthly payment: This payment method is perfect for car owners who cannot afford to pay upfront. However, look out for the installment fees, which may be charged for the convenience of paying monthly. This extra charged cost is used by the insurers to pay for the resources and manpower required to send out, collect, and process the payments.
Yes, however, you can avoid possible late fees by paying your premium on time. If you pay the premium later than the due date outlined in the contract, it will be considered a late payment. When you are late or fail to pay your insurance premium, the insurer can cancel your policy.
Unlike life and health insurance, with a 30 day grace period, auto insurers in Texas may treat the monthly premium bill as a notice of cancellation. Make sure to read the policy well or ask your agent to go over the fine print with you. If the premium is not paid on time, the policy may lapse and be canceled in less than 2 weeks from the day when the bill was mailed. This is another reason for why the majority of Texans prefer EFT payments.
When you cannot pay your insurance premium on the due date, informing your insurer that you cannot make the payment can help prevent the policy from being canceled. Usually, you will be given a grace period of 31 days, within which you must make the payment otherwise, your insurance provider will cancel the policy. Some Texas auto insurers may use the premium bill as the notice of cancellation, where the policy gets canceled if it is not paid on time.
If your inability to pay is caused by a high premium rate, you can do the following to drop the rate:
Lower your premium limit by increasing the amount of your deductible.
Shop for multiple quotes to find the coverage that will suit your needs. Speak to multiple agents and always compare “feature by feature”.
Getting a discount on your insurance policy can help lower your premium. For instance, if you have a safety device designed to prevent theft, you can get a discount.
Yes. Your parked car insurance policy will lapse once your insurance provider cannot process your payment for the month or year. However, note that your policy will not immediately lapse if you miss a late payment. Your insurer will notify you about the late payment and give you a grace period to pay (based on the terms described in the contract). Failing to pay during the grace period afforded by the insurance provider lapses your policy.