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Quick Tip: 30 Day Grace Period- Myth or Reality?

By February 4, 2020 February 5th, 2020 Blog, Business Insurance, Business Protection, General Updates, Quick Tips

Courtney discusses the consequences of canceling coverage midterm.

Many people are under the assumption that they have 30 days from the effective date of their insurance policy to switch to another carrier with no penalty. This is not the case. In order to cancel your coverage back to the effective date, you would need to show proof that you had other coverage in place on that date. The issue with this is that most carriers will not back date coverage, so in all likely hood, any alternate quote you receive will only be bound on the date requested.

If this happens, it is considered canceling your policy midterm and you would be responsible to pay for the portion of the policy period when coverage was in effect, as well as being subject to a short rate penalty of 10% of the remaining premium. This could be quite costly in the end.

For more information please contact us.