Do you pay car insurance monthly?
Drivers have the choice to pay car insurance monthly, bi-annually, or annually. Traditionally, car insurance policies used to be strictly annual but more modern insurance companies allow drivers to pay auto insurance monthly. Annual rates qualify for car insurance discounts, but you can find cheap monthly car insurance rates when you comparison shop online. Enter your ZIP code below to get started.
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Ty Stewart
Licensed Insurance Agent
Ty Stewart is the founder and CEO of SimpleLifeInsure.com. He started researching and studying about insurance when he got his first policy for his own family. He has been featured as an insurance expert speaker at agent conventions and in top publications. As an independent licensed insurance agent, he has helped clients nationwide to secure affordable coverage while making the process simpl...
Licensed Insurance Agent
UPDATED: Sep 16, 2024
It’s all about you. We want to help you make the right car insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Sep 16, 2024
It’s all about you. We want to help you make the right car insurance coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single company.
Our car insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different car insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Paying for auto insurance is a requirement for driving in almost every single state
- There are different payment options that you can arrange through your insurance company to set up the payment intervals and forms of payment
- You may be able to save money by choosing to pay your insurance premium in one annual payment rather than on a monthly billing cycle
- Paying insurance premiums on a monthly basis rather than in annual lump sums means there is a greater opportunity for you to accidentally miss a payment
- If you miss a payment for your auto insurance, you could be hit with penalties and late charges. Your insurance policy may eventually get canceled, with could result in suspension of your driver’s license and higher premiums in the future
If you own a registered vehicle, then you are likely required by your state’s laws to have some form of car insurance policy.
Part of maintaining proper insurance coverage is paying your premium, and you can face stiff penalties under state law and higher fees from your insurance company if you fail to do so.
There are various payment options you can consider in making sure that your required premium is paid on time.
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Consequences of Not Paying Your Insurance Premium
If you fail to pay your auto insurance premium, your insurance company has the right to cancel your policy. Even though insurance companies typically cannot cancel a policy that has been in force for a period longer than 60 days, there is an exception for policyholders who fail to pay their premiums.
Read more: I Need Help Paying for Car Insurance
In addition to facing the potential cancellation of your insurance policy, you could be looking at future insurance rate increases as a result of failure to pay your premium. Insurance companies keep records of your payment history, and this may be a factor in future rates you are eligible for.
Besides the potential financial headache of dealing with an insurance policy cancellation, you could be facing harsh penalties under state law for driving without a current insurance policy.
In many states, the law requires the insurance company to notify the state motor vehicle department of the cancellation of an insurance policy.
The state may then follow up to make sure that the driver takes out another insurance policy to comply with at least the minimum coverage requirements for that state.
In the event of an accident, the state motor vehicle department may follow up with your insurance company to see if your coverage is still valid.
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Options for You in Paying Your Insurance Premium
In general, the full amount of your insurance premium is due to the insurance company at the start of your policy. Most policies are on a six-month basis, which means that the premium would technically be due every six months.
However, out of convenience, most insurance companies allow for monthly payments so long as the payments are made on time.
There are many factors that ultimately influence the cost of your auto insurance premium, but one thing you can control is the payment options for your premium. You should ask your insurance company about the differences in rates depending on how often you pay your premium.
For example, many insurance companies offer a slight discount for policyholders who pay their premium on an annual basis.
You may also have the option to pay your insurance premium in just two installments a year, every six months. This can take the sting out of making one annual payment. It can also help you avoid the hassle of having to remember to make your insurance payment every month.
Of course, the more times per year that you have to remember to make an insurance payment, the more likely you are to forget a monthly payment.
You will have to weigh this possibility against your financial and cash flow situation.
In addition to the frequency of payments, it may be possible to reduce fees from your insurance company by selecting an automatic payment option. This would involve giving the insurance company the option to automatically deduct the payment from your checking account or charge it to your credit card.
Maintaining Proof of Insurance and Payment
Many states require that all drivers maintain proof of insurance in their vehicle when driving. Even if this is not the case in your state, it is still a good idea to maintain proof of insurance with you.
In addition, you should keep a file with your policy information, which would include the actual agreement and information about your premiums.
It can be helpful to retain records of your premium payment receipts. Some companies offer a payment history that is viewable through your online account.
The Bottom Line on Paying Your Car Insurance Premium
To avoid the headaches associated with either having your auto insurance policy canceled or late fees assessed by your insurance company from missing a payment, it may be best to schedule your premium payment in one annual sum.
You can work directly with your insurance company to arrange a schedule that works best for your needs. You should ask about whether you will receive a discount on your rate for paying your premium in a lump sum rather than in monthly installments.
Enter your zip code below to find car insurance premiums that work for your payment schedule!
Compare quotes from the top car insurance companies and save
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Ty Stewart
Licensed Insurance Agent
Ty Stewart is the founder and CEO of SimpleLifeInsure.com. He started researching and studying about insurance when he got his first policy for his own family. He has been featured as an insurance expert speaker at agent conventions and in top publications. As an independent licensed insurance agent, he has helped clients nationwide to secure affordable coverage while making the process simpl...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.