Payment Methods & Plans

Traditionally, auto insurers required customers to pay their premiums up-front in six-month increments.  Today, most auto insurers offer some version of a monthly installment plan for auto insurance premiums, allowing consumers a greater degree of financial flexibility. Many auto insurance companies offer auto insurance online payment options for almost all of their car insurance payment plans.

Advantages of Paying in Full Every 6 Months

Depending on your insurer, you can sometimes receive a “paid in full” discount on your policy, which gives you a very strong incentive to pay up front. Some insurers offer as much as a 10% discount for up-front payment. Another advantage is you’ll only have to remember to make an auto insurance payment twice a year.

Disadvantages of Paying In Full

Of course, paying several hundred—sometimes even several thousand—dollars all at once can put a financial strain on regular people with tight budgets.  If a financial crisis should arise, it’s much less daunting to pay a monthly installment as opposed to a twice yearly lump sum.  Being forced to furnish a large payment can sometimes lead to a missed payment and policy cancellation.

Advantages of an Installment Plan

Again, the advantage of this sort of payment plan is flexibility.  Paying insurance premiums once per month makes it easier for customers short on cash to get started—and continue—paying their premiums.  The increments make auto insurance payments a manageable increment, as opposed to a daunting sum.

Disadvantages of an Installment Plan

Consumers paying their insurance in installments will miss out on any “paid-in-full” discounts.  What’s more, making monthly payments opens up 12 possibilities (instead of 2) each year to miss a payment and risk penalties and cancellation.  Anyone looking to take advantage of an installment plan should certainly look to take advantage of a direct debit payment plan.  By having payments automatically deducted each month, a consumer can rest easy about making payments on time.

Payment Methods

Most insurers these days offer a variety of offers for making a premium payment.  You can pay by traditional snail mail, by phone, internet, and in some cases even text message!  However your choose to pay, the most important thing to remember is make your payment on time.  Establishing a long track record of prompt payments means you’ll be in a position of trust with your insurer if you should accidentally miss a payment in the future. 

Ready to hear more about payment plan options from a variety of different insurers?  Visit our quotes page to get started.