When you sign up for an auto insurance policy, you will most likely be given a couple options when it comes to how you pay for the insurance premium. Many people decide to go with the option for monthly payments, but there are also options for annual and semi-annual payments. If you have the option to pick, consider going with an annual premium payment. It can provide the following benefits you may not be aware of.
Annual Payments Can Save Money
Were you aware that you can save money over the course of a year by paying the insurance premium in one large lump sum? It is possible that your insurance company gives you a discount based on how you pay. This can give you guaranteed savings immediately, since you can easily calculate how much you'll save by selecting an annual payment.
If there are no direct cost savings in the premiums, you may be paying for it in other ways. There could be processing fees for each transaction you make, meaning you pay the fee twelve times a year rather than just once. Make sure to read the fine print to understand what surcharges are involved with making your payment. Even the cost of 12 stamps over a year to mail a check can add up over time.
Annual Payments Prevent Coverage From Lapsing
Not having insurance coverage could become a big problem, mainly because it is illegal in many states to drive without liability coverage. In addition, it is common for many lenders to require insurance when you are financing your car.
If you forget to pay your monthly premium and are pulled over by the police, you could end up getting a ticket for lapsed insurance coverage. Of course, lapsed coverage will cause you to be responsible for paying for all damage that you cause in an accident.
Annual Payments Can Be Refunded
Do not assume that you can never get back an annual payment if you make one. If you ever decide to cancel your auto insurance policy and change providers, your current insurance provider will write you a check to cover all of the unused insurance that you paid in advance for. You are not obligated to keep the insurance until your current coverage expires.
These are just a few ways that you can benefit from having an annual insurance premiums payment. Speak with an agent for more benefits of moving away from monthly payments.