There are a ton of eccentricities to think about when it comes to monthly car insurance. In fact, if you aren’t actively considering your policies, you might be missing out on a sizable chunk of money.
Usually, when you choose to pay car insurance premiums on the monthly basis, it doesn’t need any upfront payment known as down payment on car insurance.
There are a lot of factors that play into your insurance policy. It is important that you understand how these factors can affect you. In many situations, it can change whether you’re covered or not by accident, or even if the company will cover your accident. In many cases, simply getting the “primary” coverage might not meet your needs.
Table of Content
- How Does Month to Month Insurance Plan Work?
- Pros and Cons
- How Much is Average Monthly Car Insurance?
- 5 Important Tips To Save on Monthly Premiums:
- Frequently Asked Questions (FAQs):
- Monthly Car Insurance Doesn’t Have to Be Complicated:
How Does Month to Month Insurance Plan Work?
Standard car insurance in the US comes in six-month sections designed to be paid at once. This provides coverage for the six-month period. However, month to month car insurance means that you make six premium payments along with interest over the same time frame.
A monthly payment plan is quite similar to taking out a loan and paying it back along with interest.
The average interest payment is roughly one-sixth of the total amount or the equivalent to one month’s payment. This is due along with the first month’s payment. Afterwards, you pay the rest over the course of the policy.
Pros and Cons
There are significant advantages to paying every month, especially if the insurance you purchase is too expensive to pay all at once.
- Less Out of Pocket Expenses
- Time to Build Up Money for Each Payment
- Makes Expensive Insurance More Affordable
However, there are issues with paying every 30 days as well, starting with the overall amount that needs to be paid.
- Paying More Compared to All at Once
- Interest Added to First Month’s Payment
- Insurance Coverage Ends If You Miss a Payment
The pros and cons only apply to your financial situation.
There are alternatives such as lowering the overall payment in general by raising the deductible, paying for a cheaper policy, or bundling with other insurance that may allow you to switch from month to month to pay in full.
How Much is Average Monthly Car Insurance?
The price of car insurance depends on several factors, which means that it can vary wildly depending on the following;
- Driving Record
- Type of Vehicle
- Type of Policy
In the US, the average cost of car insurance plans, according to a 2014 study by the Quadrant Information Services, is $907.38.
Note that: The average includes all age groups, both genders, all 50 states, and considers all types of vehicles and driving records.
The same study broke down the average rates for every state and they vary considerably from $80 in Maine up to $213 per month in Michigan.
The averages consider all variables, which means it mixes in different types of policies along with other factors.
Different insurance rules, including state minimum requirements, dictates in large part what people pay each month.
There are also environmental factors, such as driving conditions along with the potential for theft that plays strong roles as well. However, it is misleading to assume that your premiums will be the same as the national average. You will need to find free quotes from different insurance companies to see what your average rate will be.
5 Important Tips To Save on Monthly Premiums:
Car insurance is one of the best ways to protect yourself financially should you ever become involved in a car accident. Not only that, but having the proper coverage ensures that you remain out of legal trouble as well.
However, according to the Insurance Information Institute, over 12% of motorist don’t have insurance. Why is this? Why would drivers take such a big gamble?
Well, many are finding insurance plans to be too expensive–especially individuals who are interested in an affordable month to month or even 3 or 6 month plans. The good news is, there are things you can do to get lower rates. Let’s briefly discuss 5 of the best ways to save on one month car insurance plan.
1. Ask For Discounts
Sound too simple? Well, it is. You’d be surprised to learn how much money you could save on your month by month insurance simply by asking what discounts are available. Never take the initial price at face value, ask!
2. Shop Around
Saving money on your insurance plan requires that you do extensive research. Though the most notable insurance companies may be more familiar to you, this does not mean that they will offer the best rates. So make sure you look for a company that specializes in cheap monthly quotes and offers cut rates.
Click here to get multiple quotes and save online!
3. Raise Your Deductible
In some cases, you can save more, buy spending more. This is the case with deductibles. If you would like to get cheaper insurance, consider paying a higher deductible so that your month to month payments will be lower.
4. Create Bundles
Cars are not the only things that need to be insured in our lives. Homes, businesses and other property must also be protected. The good news is that if you insure everything with the same company, you can bundle these things and get a lower rate.
5. Make Sure All Applies
Read over your policy to find out if there is anything you don’t need. In some cases, you could be paying for more coverage than necessary. So go over your policy thoroughly.
Saving money on car insurance does not have to be a hassle. In most cases, it’s simply a matter of being aware of your resources. Take a look at the list above and you may achieve a significant difference in your costs.
Frequently Asked Questions (FAQs):
This article will highlight several of the most important frequently asked questions by customers seeking to understand more about monthly car insurance payments.
- How Do Insurance Companies Configure Your Auto Rates?
Many major insurance companies base their claims on characteristics of groups, and other claims experiences. They charge more for customers that have had more claims on their insurance records, and less to those who have had more claims. Insurance scores, state qualifiers, your driving record, your gender, and even your age play into your quote (as well as several other factors like where you live).
- Why Did My Rate Go Up After I Received a Quote?
If your rate changed after your free quote, you’re not alone. There are a lot of factors that play into the actual rate you received, like something on your driving record, the driving records of other people on your policy, or if you’ve had a lapse in your insurance coverage. It’s essential to handle all of these issues on your personal record (like getting tickets and other traffic infractions sponged) to mitigate additional costs.
Click here to get today’s auto insurance rate in your location.
- Why Do Different Insurance Companies Charge Different Rates?
When you buy insurance premiums, they all have different commissions and costs figured in. Agents and brokers are paid commission to sell you the policy. Even if you buy your policy directly from the source, the rate typically includes the costs associated with the building costs, staffing costs, and other expenses related to running their business. Sometimes additional costs are incurred for customer service, claims staff, and even online services.
- How Much Insurance Coverage Do I Really Need?
Different states require different amounts of coverage. More often than not, the best way to go about insurance policies is to get $25,000 of personal liability damage, $50,000 bodily injury liability, and $100,000 property damage liability (if you hit a house or business). Most insurance companies would list this as 25/100/50 to signify how far your coverage extends.
- How Quickly Do Month to Month Auto Insurance Payments Go Into Effect?
Depending on the insurance company, your plan goes into effect whenever you receive your actual proof of insurance. Most of the time, you can access these documents online.
- Does My Receipt For Insurance Count as Proof of Insurance?
Confirmation pages do not equal insurance, nor do receipts to your email. When your insurance company receives your payment, you should have the opportunity to get your proof of insurance shortly after that from pretty much any reputable car insurer.
- Do I Need to Start a New Policy to Add a New Driver to My Premium?
You don’t have to start a new policy to get new drivers added on to your plan. All you have to do is call your monthly car insurance agent. They will make changes to your plan for you (hopefully to save you money).
- Is It Better to Pay Car Insurance in Full or Monthly Installments?
It is considerably less expensive to pay the full amount as opposed to monthly premiums. Because you save an average of one full monthly payment, you should strive to pay the full amount for your car insurance. However, if you cannot fit that into your budget, then monthly payments will have to do.
Monthly Car Insurance Doesn’t Have to Be Complicated:
As you can see, there are a lot of questions associated with month to month car insurance plan; and they aren’t always cut and dry. It might seem like all you have to do is pick a policy, but every company is different.
You have to read the fine lines, make adjustments to your plans, and add and remove drivers as necessary to guarantee the best rates. Most insurance companies have better discounts for longer term plans, but expect to spend a lot of money immediately (rather than smaller, more manageable payments each month).