Your car insurance premium is the cost of having auto insurance coverage for the duration of a policy term. This period is usually for either six or 12 months and will be clearly stated on the declarations page of your policy.
The payment arrangements for your premium will depend on the options available from your specific auto insurance company. There is generally an option for you to pay in a lump sum or in intervals, typically monthly.
Payment Options for Your Auto Insurance Premium
When you take out an auto insurance policy, you will have the option to pay the entire amount of your policy premium up front for that specific policy term. If you are interested in other payment options, many auto insurance companies allow you to make a monthly installment payment for your premium.
Do not be surprised if there is a small administrative fee tacked on for making monthly installment payments instead of paying in a lump sum. You should ask the auto insurance agent ahead of time if this fee will apply for your auto insurance policy.
In case you are nervous about the potential risk of forfeiting the paid amount of your auto insurance premium when you switch companies in the middle of a policy term, there is nothing to worry about.
Your auto insurance will simply refund the unused portion of your premium with a slight amount likely deducted for administrative expenses. You are free to cancel your auto insurance policy for any reason at any point during the policy term.
Keep in mind that if you do decide to cancel your auto insurance before the current term is over or renewed, you will need to find another auto insurance company right away because you are not allowed to legally drive without auto insurance coverage.
Compare Insurance Providers Rates to Save Up to 75%
Secured with SHA-256 Encryption
Getting the Best Price on Your Auto Insurance Premium
If you are interested in keeping your monthly premium expense low for your auto insurance, there are plenty of ways to reduce the amount of your premium.
One immediate thing you can do is ask your current auto insurance company if there are any discounts that you could qualify for. For example, some auto insurance companies will offer some discount for having anti-theft equipment installed in your car or taking a driver’s safety course.
Another way to reduce your monthly auto insurance premium is to obtain quotes from different auto insurance companies to make sure that there is not a lower rate available for you out there.
If you do decide to look for a lower rate on your auto insurance, make sure that you are not sacrificing some coverages that you will need. This is a very short-sighted approach to trying to save a few bucks and may end up costing you big time in the long term with very expensive out of pocket costs in the event of an auto accident.
If you are looking for a sure bet to lower your monthly auto insurance payments for collision or comprehensive coverage, consider increasing the cost of your deductible.
This is the amount that you would pay out of pocket first when filing a claim. If you can afford to increase this amount slightly, you can count on your monthly auto insurance payments being lower.
The Importance of Paying Your Auto Insurance Premiums On Time
However you decide to structure your auto insurance premium payments, make sure that you always make the payment on time.
Your failure to do so could result in your auto insurance company choosing to cancel your policy or refusing to renew it for another term. In this case, you would have to seek out another auto insurance policy and make sure that you are meeting all of your state requirements for auto insurance so that you can drive legally.
If you are caught without sufficient auto insurance, you may be hit with fines and penalties or even have your driver’s license suspended or revoked.
Recap on Structuring Your Auto Insurance Premium Payments
The main thing to remember about your auto insurance premium payments is that however they are scheduled, you must always make them on time.
If you do not, you could have your claim denied or have your auto insurance policy canceled outright. Most auto insurance companies will allow you to make monthly payments instead of having to pay the entire amount of the premium at the start of your auto insurance policy term.