Manage a policy lapse and automate the reinstatement workflow

Steps

1. Detect premium non-payment by monitoring payment due dates against the grace period defined in the policy form and state regulations; most personal lines policies carry a 10–31 day grace period depending on state law
2. On grace period expiration without payment, trigger the cancellation process: generate a cancellation notice with the required advance notice period (commonly 10–30 days for non-payment, varying by state and line of business) and deliver it by the method required (mail, electronic if consented)
3. Formally lapse the policy on the cancellation effective date; update policy status and cease billing; retain the lapsed policy record for the legally required record-retention period
4. When the insured requests reinstatement, collect the overdue premium, verify insurability has not materially changed (e.g., no new losses during the lapse period), and require a signed statement of no loss if the lapse exceeds the carrier's threshold
5. Reinstate the policy with a new effective date or back-date if allowed by state rules and carrier underwriting guidelines; issue a reinstatement notice and resume scheduled billing