Compared to paying by check, you have a lot more options
You don't want to let this amount pile up because car insurance is a requirement in almost all states. In any other case, a lapse in coverage could result from your insurance being canceled for nonpayment.
If you're discovered driving without insurance, you risk state fines, expensive medical costs in the event of an accident, and potentially the confiscation of your vehicle or suspension of your license. It may cost more money to purchase insurance after a period of non-use.
Many insurance providers provide a range of payment plans to help you stay current. You can then choose whether it makes more sense for you to pay the entire premium at once or spread it out over several payments.
But which option should you choose? To help you choose which option is ideal for you, let's examine the most popular plans and payment options.
What Is Your Car Insurance Payment Schedule?
Inquire about the duration of your coverage while you work with your insurance agent to obtain auto insurance. Your plan must typically be renewed every six to twelve months.
You often don't have to pay for your entire coverage all at once, though. For instance, Nationwide allows you to pay in two equal installments (paying half each time) or on a monthly basis.
You can choose from a variety of installment choices with GEICO, including a single, whole payment, or two to six installments.
When you buy a policy online, you will be given your options, or your insurance agent can tell you about the different ways you can pay for your policy.
Because some businesses provide reductions if you pay the whole amount up front, how frequently you pay your auto insurance can have an impact on how much you have to pay.
If you choose to pay for your insurance in installments, you could end up paying more even if your auto insurer doesn't give a discount for full payment. Some insurers charge an installment fee every time you make a payment, which can mount up.
Should I fully pay for my auto insurance?
Paying up your auto insurance in full has several advantages. You might get a discount; you won't pay installment fees, and you won't have to worry about paying the bill again until your insurance is up for renewal.
This makes sure that you won't forget to pay, get charged late fees, or have your insurance policy canceled because you forgot to pay.
The drawback is that the entire premium must be paid upfront.
The cost of your auto insurance depends on a variety of factors, but depending on where you reside, the average cost of liability-only insurance with Progressive, for instance, often runs from $466 to $877 for a six-month term. Paying over time can be the best option if this doesn't fit your budget.
Monthly, quarterly, or semi-annual payments are typical terms. You can choose the payment option that works best for you with many insurance companies.
If your circumstances change during the course of the policy, you could even be able to make changes to your plan.
Although it's not normally necessary, there are some circumstances in which it might be. For instance, if you've previously had your insurance terminated for nonpayment, some insurers in some states may ask you to pay your entire amount up front.
How to Automate Insurance Payments
To make paying for your auto insurance easy, several insurers provide autopay options. When you set up an autopay plan, the payment is sent on the right day without you having to do anything.
Most insurance companies will accept transfers for autopay from the following sources:
- Transfer of Funds Online (EFT)
- a credit card
- Bank card
- Paying bills online with your bank
When you set up the EFT option through your insurance carrier, there are often no service fees involved. If you set up automatic payments using your credit or debit card, there can be a small service charge.
There are often no charges if you choose to use your bank's online bill payment service unless you choose to make a hurried payment.
Understand the costs so you won't be caught off guard regardless of the system you use.
Make sure to tell your insurer and adjust any autopay settings if you move banks or receive a new credit card. If you have access to your account, you might be able to do this online. You won't miss a payment this way, preventing the cancellation of your insurance.
Automatic Payments
If you choose not to sign up for autopay, you will have to make payments manually. Common choices include:
- Check payment
- Using a credit card to make a telephone purchase
- Making a payment through the business's app
Remembering to make payments on schedule is essential because they won't always be processed automatically. If not, you run the danger of having your insurance canceled for nonpayment.
Consider adding a reminder to your phone, noting the payment date on your calendar, or using a service like Memo To Me to help you remember.
The conclusion
To maintain your auto insurance policy in effect, you must pay your premiums. Even though purchasing in full is frequently discounted, your budget may work better with a payment plan. Decide how you'll pay after choosing your plan.
Whatever mode of payment you choose, make sure you send it in on time to keep your insurance in effect.
