As most people today know, credit history is a big deal when it comes to getting the best insurance rate. So, it stands to reason that your insurance premium payment history would also be looked at critically.
An insurance company's ability to cancel a policy once it is fully in force is very limited. There is no question: if you fail to get that payment in on time, your policy will cancel. And, what if you have an accident before the company receives your payment? You will not have coverage.
Insurance companies no more want to cancel your policy than you want it canceled. The only way an insurance company can manage the tens of thousands of transactions experienced daily is with help of automation. The computer is non-judgmental. There is no one there to look at how long you have been insured with the company, or how good your claim history has been. And, every time a cancellation has to be sent out, there is an associated cost. Then when you do pay late, there is additional cost to reinstate the policy. These unnecessary transactions are much like small claims. Companies are increasingly taking a dim view of late payment cancellations are frequently are refusing reinstatement.
It is a good practice to pay that premium upon receiving your premium notice. Insurance companies have some many payment options available that, you should have no problem finding a plan that will work for you.