What are the penalties for not paying an insurance premium?

In New Jersey, the penalties for not paying an insurance premium depend on the type of insurance policy and the circumstances. Generally, when an insurance company fails to collect payment on the premium for an auto or health insurance policy, they will discontinue coverage and send out a notice of cancellation. This means that you will no longer be insured and will be liable to pay any and all costs if an accident or medical incident should occur. If you fail to pay the premium on a life insurance policy in New Jersey, the policy may become void or lapse. This means that you will no longer have coverage, and that you may not receive any death benefits associated with the policy. In some cases, the insurance company can sue you for breach of contract if you fail to make payments on an insurance policy. The penalty for this varies, but often includes repaying the amount not paid plus any late fees and interest. No matter what the type of insurance, it is important to make the required payments on time in order to remain covered. Failure to do so may result in harsh penalties, including a lapse of coverage, the possibility of litigation, and potentially having to pay more in the long run.

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