The Result of a Non-Pay Insurance Cancellation


If you read my previous blog post The Importance of a Clean Driving Record in Ontario, you will know that getting cancelled by an insurance company is one of the worse things you can have on your insurance record.

What is a Non-Payment Cancellation?

As the name implies, if you do not pay your premium, the insurance company will cancel your policy.

Luckily, getting cancelled for non-pay is a long process which can take up to 60 days. The process looks something like this:

  1. A payment is missed
  2. The insurance company is usually notified of the missed payment within 10 days.
  3. The company sends out a notice to the insureds address that a payment has been missed and to make a payment within a certain time period.
  4. If payment isn’t made in the stated period, the company issues an official cancellation statement which is mailed to your doorstep with an end of coverage date.
  5. When this cancellation is mailed, the company in many cases will still accept a payment and reinstate the policy.
  6. If payment isn’t made by the final date, the policy is terminated at which point it may not be reinstated and a new policy must be created.
  7. Client is given a “time on risk” amount which is owed and if it is not paid, client will be sent to collections.

If a client gets to the last step, he or she may have an issue going forward. A non-pay cancellation will show up on your record forever however it is rated for 3 years. This would make any new policies much more expensive.

Some insurance companies do not accept clients who had a single non-pay cancellation in the last 3 years.

A non-pay is equally as bad as an at-fault accident in many cases. If a company does accept you, they may not offer monthly payment plans and will require a full payment for the year prior to creating a policy.

What is the Best Way to Avoid a Non-Pay Cancellation?

Most companies accept payments through automatic bank withdrawals. Some accept credit cards and almost all of them will accept a 1 time payment.

The simplest way is to pay for the policy upfront for the entire year. You will save some money because the company won’t charge you fees for the payment plan.

If a one time payment is not an option, a good idea to prevent a cancellation for non-payment is to have overdraft protection for your bank account. This will automatically cover the remainder of your bill in case their is insufficient funds.

Non-Payments can be Costly

Whenever an insurance company attempts to withdraw money from your account but does not succeed because of lack of funds, the insurance company will charge an NSF fee. The fees usually range from $25-$50 per failed transaction. In many cases, your bank will also charge you an NSF fee on their end so these fees can really add up.

To conclude, along with driving carefully and avoiding tickets, its also extremely important to avoid missing payments as much as possible. In most cases, if a policy gets 3 NSF’s in one policy term, they will automatically cancel you with no option to reinstate.

Stay safe everyone!

Picture of Filip Ambroziak

Filip Ambroziak

Need a quote for your home, auto or business? Call Filip Ambroziak at (416) 803 2113 or email him at

More to explore

Insurance Trends in 2024

The insurance industry is one which is constantly changing. It is a mature industry with many moving parts. This makes it much

The Most Stolen Cars of the Year

2021 was certainly a year which took a lot from us in Ontario. We had to shut down restaurants, gyms, events and

Picture of Filip Ambroziak

Filip Ambroziak

Throughout his career, Filip Ambroziak had the opportunity to insure a wide variety of unique clients.

From high value homes, to multi-million dollar businesses, Filip has insured it all.

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *