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Frequently Asked Questions
The Department wants all New Jersey drivers to make informed decisions regarding their auto insurance coverage. We are happy to assist with any additional questions you may have about insurance.
What if I don’t pay my premium?
If you don’t pay your insurance premium, the company will cancel your policy. Getting a policy from another insurer may be difficult or may cost more if you let your policy lapse and go without insurance. A lapse exceeding 30 days could place you in the assigned risk market. (See page 9).
I sent in my insurance payment on the due date, but the company said it was too late and still canceled my policy. Can they do that?
Whether or not a policy is terminated for a late payment depends on what type of payment is due. Most companies will allow policyholders to make installment payments on their premiums and may even accept these payments received after the initial due date. This is permissible because a policy is already in force and there may be equity (premiums already paid) available to continue coverage for a short time. However, if no payment is received, the company will issue a notice of cancellation for nonpayment of premium. If this payment is not received before the due date, the policy will terminate. Until the initial payment for a policy renewal is paid, there is no policy in force. Therefore, when the renewal payment is not received by the due date, the previous policy expires and the offered policy does not become effective. Should the policyholder wish to continue coverage with that company, the company would then need to write a new policy for that customer.
I got a notice that said I had to make my overdue premium payment or my policy would be canceled on the 15th. I took the money to my agent on the 15th, but they said it was too late and the policy had already been canceled. How can this be?
Because an insurance policy must provide coverage for every full 24-hour day that it is in force, every insurance policy expires at 12:01 a.m., meaning one minute after midnight on the specified date. Therefore, any premium payment must be received before the cancellation date in order for the policy to remain in force.