Critical debt advice when you’ve missed your insurance repayments
Insurance Debts overview
Insurance policies are used to protect you from certain situations, such as loss or damage. Some insurance is required to abide by the law, such as car insurance, while others are required to meet your obligations to other financial contracts, such as home insurance which is required when you have a mortgage.
Different lenders and forms of insurance have differing terms and conditions that define how they deal with those who fall behind with their repayments. That said if you fall into arrears with your insurance repayments your provider will, in most instances, request that you make a repayment to bring your account up to date. If you fail to do so, your insurer will eventually cancel the policy, which will invalidate your insurance. This leaves you open to different risks. In the instance of your vehicle, you could be prosecuted for driving/riding without insurance, while for home insurance you will leave yourself unprotected from burglaries or accidental damage.
Debt help tips for tackling Car Finance Loan Debts
Worried about debts that won't go away?
- In the case of insurance debts, you have few options for repaying what you owe. Either you make a repayment to catch up with your agreement, or your provider will cancel the policy, with some charging an early cancellation fee, as well as requiring that you repay the full balance of repayments that are outstanding. Because of this you may want to prioritize these arrears above all others.
- If you’re feeling the strain of insurance arrears and/or you’re worried about your financial situation you should seek professional advice. You may want to begin by exploring the many available debt solutions that could be suited to your circumstances.
IVAs – A potential debt solution for Insurance debt
An Individual Voluntary Arrangement could settle your debts if you owe more than £5,000 to two or more creditors.
Designed to allow you to repay what you owe over either five or six years, an IVA could provide for repayments at a lower rate, with all remaining debt written off after the set period.