It is important to pay your insurance on time because not only will it save you late payment fees, it would also save you from jeopardizing your auto insurance coverage and future rates. In the worst-case scenario, sending your payment too late might cause your insurer to cancel your insurance policy. This leaves you driving around with no auto insurance, which is dangerous and illegal. Just because your insurance company received your payment doesn't mean your policy will be reinstated. Especially when sending payments through mail, it's dangerous to cut it too close to the payment due date.

In this case, you may think you're still covered but you're not aware that your insurer has already cancelled your policy. If you get into an accident, you will have no auto insurance to back you up, leaving you with a wrecked pile of metal that you will have to pay the repairs for yourself. Furthermore, you may even lose your license to drive. In most states, it is mandatory to have auto insurance and this can affect your driving privileges if you're not careful.

Another possible scenario is when your insurance company reviews your payment history and finds that you have been sending your payments late, they might decide against providing your auto insurance any further and send you a notice. Although you can always find another insurer, it's a bother to do so and this leaves you unable to drive your car as well.

Late payments can also damage your credit score. Many insurers review your credit score to decide how much to charge you. Having paid late on previous insurance policies might cost you more when you buy a new policy when you could have qualified for better rates. Now instead of getting regular rates your new car insurance policy will be surcharged, just because you made a few late payments.

If there's really no other way but to send in your payment late, you should contact your insurance agent immediately. They can provide you with alternative ways of sending payment, and give you information on the consequences of not paying your insurance premium on time.