Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Here's what you need to know...

  • When you buy car insurance, you have to decide if you want a plan with a six-month term or a 12-month term
  • For renewals, payment is due by the expiration date or the coverage afforded under the policy will expire
  • While some carriers do still require policyholders to pay in full, most of the larger insurers now accept installments
  • If you pay your policy in installments, you can choose to pay monthly, quarterly, or semi-annually
  • See if you can request that the company electronically draft your payment so that you don’t have to make manual payments each month

It’s important to keep up with your auto insurance invoices. If you miss just a single payment, your insurance will lapse and you could find yourself facing serious penalties enforced by the state and your lender.

The best way to prevent this from happening is to understand what your payment options are and to mark your calendars with your due dates.

Every company has their own payment system in place. While the state sets rules that you must be notified in writing before your policy is canceled, it’s up to the company to decide whether they will accept premium installments.

If you want to familiarize yourself with how you pay your car insurance premiums, here’s a guide to help.

Start comparison shopping today by entering your zip code into our FREE comparison tool!

Know the Policy Term


Auto insurance policies don’t last forever. If you were guaranteed to pay the same rate for as long as you were licensed to drive, the insurer would never make any money, which is why policies are sold in terms.

The term, or policy period, is the length of time that the rates for the coverage that you purchased at the beginning of the policy will remain the same.

Insurance companies that offer standard personal car insurance policies will either offer six-month or 12-month insurance terms. The length of your term will dictate what types of payment plans are available and how much is due to pay your premiums in full at the beginning of the term.

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What are the benefits of paying your premiums in full?

Up until just a few decades ago, anyone who purchased insurance was expected to pay their premiums in full to activate and renew coverage.

After recognizing that insurance consumers need more flexible payment options, companies offer installment options that help you split up the payments as they come due.

There are benefits of paying in full if you’re financially able to. One of the biggest benefits of paying in full is that you don’t have to worry about missing a payment and having your coverage lapse during the term.

Since the company doesn’t bill you, you can avoid the invoice fees that drive your rates up. Some companies even offer a pay-in-full discount.

What are the installment options that you can choose from?


Larger carriers offer a long menu of installment options that help make paying insurance convenient. If you can’t pay the entire six-month or 12-month premium that you’ve been billed on your renewal, make sure to call your insurer and ask to set up an installment plan.

Here are some of the most common plans that you can choose from:

  • Monthly payments – Payments made manually
  • Automatic EFT – Payments taken out of your account monthly
  • Quarterly – Payments due once every three months
  • Semi-annually – Payments due every six months for annual policies
  • Five-pay plans – Pay two months down and skip a month of payments at the end of your term

How to Make the Payment

All insurance companies accept payments by credit or debit card. Some companies may not accept Discover or American Express cards.

Check to see if there are restrictions on the cards accepted. In addition to credit cards, most providers still accept payments made by check, money order, and cashier’s check. Cash payments must be made at local offices.

Technology has changed the way that you can make your payments. Almost all companies accept payments by phone and some even take payments via their toll-free system 24 hours a day.

You can also mail a check to the payment center or drop off your payments in person at your agent’s office. If you have automatic payments, submit a canceled check to activate the drafts.

One of the worst things that you can do is put off making an insurance payment. While some companies offer grace periods, not all companies do.

If your due date passes, the company will terminate your coverage and you won’t be in compliance with strict insurance laws. If you find a lower premium, activate your coverage and submit your cancellation request in writing.

If you can’t afford your current insurance policy, use our FREE online quote comparison tool to determine whether you can save money switching carriers.