Understanding Policy Lapses: What Happens When a Bill Is Missed 
When you move, one of the first things you need to do is notify all of your service providers, including your insurance company, of your new address. However, even with the best of intentions, address errors can happen. If your insurer continues to send bills to your old address, there’s a chance that the bill may go unnoticed. Missed payments due to these address mistakes can lead to a policy lapse, leaving you without coverage during a critical time. Policy Lapse Defined
A “policy lapse” occurs when an insurance company terminates your policy due to non-payment of premiums. The most common reason for this is that the insurer has not received the required payment by the due date. While missing one payment may not immediately result in a cancellation, it can lead to other consequences such as loss of benefits or the inability to file claims under that policy. In many cases, insurers will issue a notice of cancellation if they don’t receive payment within a set period, but if the address is incorrect, you may never even receive that notice.
Consequences of a Lapsed Insurance Policy
The biggest consequence of a policy lapse is that your insurance provider will refuse to honor any claims made during the period when the policy is not active. Imagine needing your life insurance to cover medical expenses or burial costs, only to find out that your policy was canceled because you missed a bill that never made it to your new address. In such situations, it can be a financial nightmare for you and your loved ones.Why Address Errors Lead to Policy Lapses
When you move, one of your most important tasks should be notifying your insurance company of your change of address. This is critical because most insurers send bills and important policy notices to your address on file. If your insurer doesn’t receive the bill because it was sent to an old address, you may miss the payment deadline and your policy could be canceled for non-payment.Common Causes of Address Errors
- Failure to Update Your Address Promptly: The most common reason for address errors is simply not updating your address with the insurer in a timely manner. Moving is hectic, and it’s easy to overlook informing your insurance provider of your new address.
- Forwarding Mail Issues: Even if you’ve set up mail forwarding with the post office, it can sometimes take time for your forwarded mail to reach you. If the insurer sends a bill to your old address and the forwarding process isn’t seamless, you might not receive the bill in time to make the payment.
- Outdated Contact Information: Sometimes, insurers use multiple addresses or contact methods for different policyholders. For example, if your life insurance company has an old address listed under your spouse’s name or an incorrect address from your last policy renewal, this could lead to errors when sending your payment information.
- Online Accounts and Notifications: If your insurer has an online portal, it’s easy to miss email reminders or electronic bills if your email address is outdated or not checked regularly. In this case, the problem isn’t just a physical address change but also a failure to update your contact information across multiple platforms.
We contacted Trief & Olk to help us with a life insurance issue and Shelly Friedland was the attorney assigned to our case. Before Shelly took our case she explained to us that the likelihood of our success without going to court was possible but not likely. Unfortunately we did not get the outcome we had hoped for but it was our decision to not move forward and have our case litigated. Shelly is very knowledgeable and was very straight-forward in her assessment of our case as we moved forward. She was very patient and thorough in answering our questions. She always responded in a timely manner and listened to our concerns. We would certainly recommend Shelly and would use her firm again in the future.”
- John Ramig
If there is any possibility of winning your life insurance case – this is the place to do it for you. They are efficient, honest and will achieve the best possible outcome.
Shelly Friedland worked on my case where a life insurance policy had lapsed and was even a few days beyond the grace period. Farmers had rejected my claim twice and was unwilling to take a second look. Shelly was able to get them to pay the entire claim without going to court, and the full amount was deposited in my account within a couple months. Highest recommendation.”
- Kathleen Brown
Trief & Olk is a superior law firm. Their attorneys and other legal professionals have a brilliant understanding of the law and the litigation process. They diligently perform their work in an efficient, strategic and cost-effective manner to ensure the best possible outcomes for their clients.
- Christopher Hughes
Steps to Take If You Missed a Bill and Your Policy Lapsed
If you’ve missed a bill and your insurance policy has lapsed, it’s crucial to take swift action. The sooner you address the issue, the better the chance you have of reinstating your policy or preventing further complications. Here’s what you should do:1. Contact Your Insurance Company Immediately
As soon as you realize that your policy has lapsed, don’t wait for the issue to escalate. Contact your insurer right away and explain the situation. They may offer to reinstate your policy, especially if the lapse was due to an address error that was outside of your control.- Explain the Address Error: When talking to the insurer, be clear about the address change and provide documentation showing that you updated your address with the post office or any other relevant authority.
- Request Reinstatement: Ask if your policy can be reinstated, especially if the lapse occurred within a short time frame and the insurer has a grace period for missed payments.
2. Provide Proof of Address Change
To strengthen your case, gather all documentation proving that you moved and updated your address with the insurance provider. This could include:- A change-of-address form from the postal service.
- Utility bills or lease agreements showing your new address.
- Any email correspondence from the insurer acknowledging the address change.
Settlements & Verdicts
3. Ask About Reinstatement Policies and Grace Periods
Many insurers allow policyholders a grace period to catch up on missed payments before the policy is officially canceled. The length of this grace period varies by insurer, so it’s important to ask about it directly.- Missed Payments: Ask if you can pay the missed premium immediately or if there are additional fees to reinstate your coverage.
- Penalties for Reinstatement: Some insurers charge a penalty or interest on the overdue amount if a payment is missed. Be sure to clarify these details so you know what to expect financially.