Car insurance grace period
6 minute read Published on Oct 21, 2025 by BrokerLink Communications
Imagine this: You wake up late on Monday morning, only to realize you forgot to pay your monthly insurance premium that was due last Friday. Or maybe you bought a new car on the weekend, but your insurance provider was closed. Are you still able to legally drive your vehicle to work? Both of the scenarios highlight the importance of understanding what a car insurance grace period is.
Car insurance grace periods are a short window of time following a missed payment or insurance policy change during which your coverage remains valid. That being said, car insurance grace periods vary by province and insurance companies, meaning they aren't guaranteed.
What is a car insurance grace period?
As we briefly mentioned, a grace period is a specified timeframe after a missed payment during which you still have an active insurance policy. This timeframe provides policyholders with enough time to make their overdue payments without having their auto insurance coverage cancelled.
One thing to note is that Canadian insurance regulations don't mandate grace periods; it really comes down to whether or not your insurance provider is willing to provide customers with some leeway when it comes to their payments.
Car insurance grace period vs. car insurance lapse vs. cancellations
Grace periods differ from lapses or cancellations. For example, a lapse indicates a period of time when your auto insurance policy is inactive. Cancellation means your insurance company has voided your car insurance policy, leaving you without coverage. ]In contrast, the car insurance grace period applies as a buffer to prevent lapses and cancellations from occurring in the first place.
Generally speaking, grace periods can range from 15 to 30 days, depending on your insurance provider and your specific policy terms. During this time, if a payment is made, your coverage will continue. If non-payment continues, a lapse in coverage will occur before a complete cancellation of your car insurance coverage is made.
Provincial differences
Car insurance regulations, including grace periods, can vary significantly across provinces. However, having valid car insurance is a legal requirement across Canada:
Ontario
In Ontario, grace periods are not legally regulated by the Financial Services Regulatory Authority of Ontario (FSRA). Therefore, it's up to your insurance company to decide whether they offer this or not. If they do, these periods typically range between 15 to 30 days. If you live in Ontario, you'll need to speak with your insurance provider directly or review your policy documents to determine whether grace period provisions are currently applied to your existing auto insurance policy.
Alberta
Alberta has a 14-day grace period for auto insurance that is overseen by the Alberta Insurance Rate Board (AIRB), allowing drivers to make late payments without having their policy cancelled or after they purchase a new vehicle.
British Columbia
British Columbia car insurance is regulated by The Insurance Corporation of British Columbia (ICBC). Unfortunately, there are no car insurance grace periods for late payments or policy renewals. Therefore, you will not receive coverage for these scenarios. However, if you've purchased a new car, you have a 10-day grace period for transferring the vehicle.
Quebec
In Quebec, the Autorité des marchés financiers (AMF) regulates car insurance. If you have missed payments with your insurance company, there is no grace period. Ultimately, because grace periods work differently between provinces, it's important for all drivers to understand what the policies are for their insurer and the potential consequences they may experience if they do not follow their payment plan.
What happens if you miss an auto insurance policy payment?
Missing a car insurance payment can have short and long-term consequences. While you may be protected by a grace period offered by your insurance provider during which you can make your premium payment, if you fail to pay by the time the grace period ends, then you could face a cancellation of your existing policy. You may also be required to make a double payment, covering the month you missed as well as the next month, to ensure that you are maintaining coverage in force.
Driving without insurance is illegal in Canada,and can result in significant fines, driver'slicence suspensions, vehicle impoundmentsand higher premiums in the future. For example, in Ontario, the fine for driving without insurance ranges between $5,000 for the first offence and can skyrocket to $50,000 for repeat offenders. When you miss a premium, the following may result:
It can affect your driver's abstract
Additionally, driving without insurance will also be listed on your driving record, which will be seen as a red flag to future insurers who will then deem you a high-risk driver when you attempt to buy new car insurance.
Furthermore, if you have a lapse in your car insurance and you wish to reinstate it, your insurance company may issue a reinstatement fee, late fees, higher insurance costs, and the inability to pay your premiums through a monthly payment plan.
Buying a new car: temporary coverage or grace period?
Buying a new car over the weekend, when many car insurance companies are closed, raises some concerns amongst Canadian motorists in terms of coverage. Some insurance policies include a temporary coverage provision that provides buyers with a grace period that allows them to buy insurance after they buy a new vehicle.
For example, in Alberta, the grace period is seven days, whereas in British Columbia, drivers have up to 10 days, if they meet certain conditions. If your car insurance lacks a temporary coverage clause, you'll need to purchase new coverage before driving the new vehicle.
It is important to note that your coverage may remain the same when changing vehicles; therefore, if you currently own a vehicle with third-party liability coverage only and opt for a brand-new model of the current year of vehicle, you are going to want to add more coverage before you drive it to protect your investment.
Common misconceptions about missed car insurance payments
Oftentimes, there are a lot of misconceptions when it comes to missing insurance premium payments, which can lead to lapses in coverage and legal penalties. To ensure you're always covered, here are some misconceptions we've clarified for you below:
My missed payments on my car insurance policy won't affect my credit rating
This is false. While most car insurance companies won't report on-time car insurance payments to the credit bureaus, they almost always report late payments. While one or two missed payments won't significantly impact your credit score, numerous missed payments can negatively affect your rating.
In provinces like New Brunswick and Nova Scotia, where insurance providers are able to use your credit score to determine your auto insurance premiums, a low credit score can lead to more expensive insurance rates.
Do all auto insurance companies offer grace periods?
No, not all insurance companies offer grace periods to customers if they miss their car insurance payment. This is exactly why it's important to clarify with an insurance agent and understand what your policy entails; otherwise, you could be subject to late fees and other legal consequences for driving uninsured.
Pro Tip: How to avoid missed payments on your auto insurance
We get it--life gets busy. To ensure you pay your premiums for your auto policy by your due date, consider setting up automatic payments from your bank account. Another payment option you have is paying for your auto insurance upfront, rather than monthly. Not only will this prevent you from paying late fees, but most insurers offer discounts to those who pay upfront, which means you could save money on your coverage.
Will my insurance company notify me if I miss a payment or if they cancel my car insurance?
Often yes, but not always. Some cancellations can happen without any notice, especially for repeated missed payments in your insurance history.
Does every Canadian province have the same grace period?
No, how grace periods work will vary between provinces and insurance companies.
What happens if I miss my payment by one day?
If you miss a payment by one day, you may still be covered, but you'll likely need to pay a late fee regardless. Contact your insurance company right away for payment information.
Do I need proof of insurance to buy a new vehicle?
Yes, you will need proof of insurance to buy a new vehicle from a dealership or a private seller. Ensure you have coverage before, so you can drive your car home and be protected.
Contact BrokerLink today
Don't assume your insurance provider offers grace periods, as coverage gaps can lead to serious financial and legal consequences. To ensure you have financial protection, review your current policy and speak to a broker for clarification.
Whether you have questions about how grace periods work, are looking for new coverage, or have other questions or concerns, the experienced brokers at BrokerLink have got you covered. We've got access to numerous policies from top providers across Canada and can help you purchase:
To work with us, contact BrokerLink to speak with a broker directly or get a free car insurance quote using our online quote tool!
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