What Payment Options Do Auto Insurance Companies Offer

Consumers who are looking for auto insurance coverage may be wondering what payment options are available. Drivers will want to find a company which can offer a good level of coverage as well as one which has several payment methods for policyholders to choose from.

Each auto insurance company determines which payment methods it will accept. Payment frequency also varies by provider, but most companies will allow a policyholder to arrange to pay his or her premium on a monthly basis. Choosing this option may mean having to pay an administration fee, so a driver will need to consider whether the convenience of being able to pay premiums more frequently is a good idea, due to its higher overall cost.

Auto Insurance Payment Methods

Insurance companies will likely offer their policyholders a number of payment methods to choose from. Customers can choose to mail a check or a money order if they wish, and many people still prefer this low-tech method of paying their premiums.

In a situation where a policyholder would like to make a one-time payment, the insurance company may accept payments made by credit or debit card. The company may allow the policyholder to pay with an online check. The policyholder makes the arrangement by phone and the money is transferred within a few business days.

A simple and convenient payment option for auto insurance buyers is to arrange for withdrawals from a checking account or that the amount of the premium be charged to his or her credit card.

Auto Insurance Payment Frequency Options

An insurance company is always willing to accept payment for the full term of the policy at once but if doing so would put a strain on a customer’s budget, there are other options available. Some companies will allow a policyholder to pay half of the amount owing at once and then the other 50 percent two months later.

Paying three installments is another possible option for making auto insurance premium payments. The customer would pay 40 percent of the premium initially and 30 percent will be due at one and two month intervals thereafter.

For some customers, paying for insurance coverage in four installments is a good choice. The initial deposit is 25 percent and the policyholder would then pay an additional 25 percent for the next three months.

The auto insurance company may agree to split the payments over five or six installments. The latter option will likely be offered for policies which are being renewed only.

Auto insurance buyers should make a point of shopping around before deciding where to buy their coverage. Along with considering the policy provisions and the cost of coverage, consumers should make a point of asking about payment options and payment frequency.

Evaluating all of these elements will help a driver find the right auto insurance policy for his or her needs. Consumers will want to consider their cash flow and budget when arranging for coverage.