Payment Options

Paying Monthly.  Different Insurance Carriers offer various payment programs.  The general payment option on a 6 month policy is about 20% down with the balance paid over 5 monthly installments.  Each installment usually carries a billing fee of 3 to 9 dollars depending on the company. 

Last Month Free.   Some payment programs have a down payment (usually 25%) and pay the balance with 4 monthly installments instead of 5.  This means that you will not have a payment during your final month.  The last month isn't free, you simply paid it ahead of time.  The benefit from this method is since you have extra money built up because you are paying it ahead of time, a late payment wouldn't cancel the policy as soon.

Annual Policies.  Very few companies offer annual policies but the normal down payment is 18% with the balance paid over 10 or 11 installments.  The benefit of an annual policy is you only have one down payment per year and your rates are locked in.  This may not be beneficial if something that lowers your rate (tickets drop, birthday, etc.) will take place within the next 6 months.

Paid in Full.  If a policy is paid in full, you will automatically save the billing fee of 3 to 9 dollars per payment that is charged by most carriers.  This could be a considerable savings.  In addition to avoiding the billing fees, some carriers offer a "paid in full" discount of 5 to 20 percent.

EFT.  Electronic Funds Transfers are both convenient and wise.  If you allow your Insurance Company to automatically sweep your bank account (Electronic Funds Transfer) for the monthly payment, you can sometimes receive a small discount.  Other companies may not offer the discount but will require a smaller down payment or waive the monthly billing fees.

Check by Phone.  Several carriers offer payment options over the phone including checks by phone.  This will ensure your payment isn't delayed by mail.  Some carriers have automated systems to pay 24 hours and others require you call during normal business hours.  Some carriers charge a fee and others don't.

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