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Grace Periods Extended for Insurance Premiums During COVID-19

New Jersey has taken steps to temporarily delay cancellation of insurance policies for nonpayment of premiums. By executive order, Governor Murphy directed insurance companies to extend grace periods for policyholders who may have difficulty paying for their insurance because of the coronavirus, COVID-19. During this grace period, you may be able to delay payment of your premium and insurance companies are not allowed to cancel your insurance for doing so. The grace period applies to both individuals and businesses. The governor’s order includes the following types of insurance:

  • Medical/health
  • Dental
  • Automobile
  • Homeowners
  • Renters
  • Life
  • Medicare supplement

This article explains what has been done by the State of New Jersey and what insurance policyholders must do to prevent cancellation of their insurance policies. This information is primarily for persons who pay for their own individual insurance plans, including businesses. Please note that the grace period also applies to those who have Medicare Supplement policies, and to some employee paid insurance plans through their employer. For this last group, it is best to speak directly with your employer and, for those working at large employers, with the human resources department.

How much time do I have to pay my premium?

Under current law, an insurance company may cancel a policy for failure to pay the premium. A notice is sent to the policyholder about possible cancellation if payment is not received within a set period of time (grace period). The length of time depends on the type of insurance. The Department of Banking and Insurance (DOBI), the agency responsible for implementing the executive order, has temporarily suspended the existing grace periods and created new ones. This means that if you are experiencing a financial hardship due to COVID-19, you have more time to pay.-------------------------

Policy   Length of grace period
Medical/Health   60 days (minimum)
Dental    60 days (minimum)
Automobile    90 days (minimum)
Homeowners     90 days (minimum)
Renters    90 days (minimum)
Life     90 days (minimum)
Medicare Supplement     60 days

This does not happen automatically
—you must apply and qualify for the extended grace periods. If approved, the grace periods below will apply, and your insurance coverage will not be cancelled for nonpayment of premiums during this time.

During this period, policies cannot be cancelled for nonpayment of the premium. However, the  extended grace period does not change the terms of existing insurance policies. It also does not eliminate or forgive the premium payments that may become due during this period. Premiums will still be due at a later date, but can be “amortized,” or paid off over time.

Does this extension apply to everyone?

You must meet certain requirements to qualify for an extended grace period. Requirements of both insurance companies and policyholders are described below.

Policy Holder Requirements

  • You must have been in good standing (up to date with payments) with your insurance companies on March 1, 2020. You may choose to start the grace period retroactively on April 1, 2020 or on May 1, 2020.

  • The grace period applies to all installment payments (for example, monthly or quarterly), including down payments for renewing insurance. You must inform your insurance company if you want to continue their coverage under an existing policy.

  • If the policy is renewable during the grace period, it can be renewed for the same terms and conditions if you approve. This renewal is available even if you have not paid the initial renewal (first payment) during the grace period.

Insurance Company Requirements

  • Cannot cancel any insurance policy for nonpayment of premiums for the term of the insurance policy.

  • Cannot charge any late payment fees, finance charges, or delinquency charges that would otherwise be owed.

  • Cannot report late payments to credit rating agencies.

  • Must allow an extension of time for policyholders to pay premiums that are due but not paid during the grace period (either 60 or 90 days depending on the type of insurance). Policyholders can pay these premiums later, either over the remainder of the current policy term or in 12 months, whichever is longer. An insurance company may provide a longer repayment period if it decides to do so.

  • Cannot consider any late payments during the grace period in setting the costs of future insurance premium.

  • Are required to put information on their websites and provide each policyholder with an easy-to-read explanation of the extended grace period.

  • Must provide an alternative way to make premium payments other than in-person (for example, online or by mail). This applies to anyone who accepts premium payments on the behalf of insurers, such as agents or brokers.

What should I do now?

Extended grace periods are not applied automatically. You must contact your insurance company to take advantage of the emergency grace periods and to discuss options to pay your premiums over time after the respective grace periods ends. Check your insurance company’s website for information about how to do this. You should also have received written information about this from your insurance company. Although different insurance companies may require different information from you, at a minimum you will need to provide the following:

  • Name of policy holder
  • Type(s) of insurance and the policy number(s)
  • Statement that you are experiencing financial hardship related to COVID-19 (this wording should be sufficient; you do not need to provide precise details)
  • Request for extension of the premium payment date until____[choose a date when you would like the grace period to end based on when you want it to have started.] Remember that there are different grace periods depending on the type of insurance.
  • Whether you want to remain on your current premium payment cycle

Where can I get more information?

More information about these protections is available on the NJ Department of Banking and Insurance (NJ DOBI) website.

If you have a specific legal question, contact the LSNJLAWSM hotline at 1-888-LSNJ-LAW (1-888-576-5529) or apply online at             

A note about auto insurance

Auto insurance companies are required to retroactively reduce premiums for two months (as of March 9)  because of reduced driving. The reduced rates should remain in effect during the declared state of emergency. ​​​​​​