Can I pay car insurance quarterly?

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Joel Ohman
Founder, CFP®

UPDATED: Aug 1, 2019

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Here's what you need to know...
  • It is important to have car insurance.
  • The insurance company does not have much leniency if you miss a payment, so be sure to pay on time.
  • Most insurance companies offer a variety of payment options, including quarterly.

You have a lot of options when it comes to customizing an auto insurance policy that meets your coverage needs. But what about payment options?

Because it is required by law to have auto insurance, insurance companies do their best to make it accessible to everyone.

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Paying on Time

Couple with papers stressed over bills.

It is important to pay your insurance premiums on time to avoid any problems with late fees or lapse of coverage. In the event you stop paying your premiums as agreed upon, the insurance company could decide to cancel your policy.

A cancellation of policy can really put you at a disadvantage.

You may have a hard time trying to find a new insurance policy through another company, and if you do, you are almost guaranteed to be charged higher premiums.

Driving without insurance can get you in even more trouble if caught, including suspension of your driver’s license. Not being able to drive can put a damper on your lifestyle.

Without a driver’s license, you can’t drive yourself to work or take the kids to school. You don’t want to find yourself without the ability to drive, so it is very important to pay your car insurance on time.

Standard Payment Options

A long time ago, you were only giving one option for paying car insurance, and that option was once a year. As you can imagine that would be very expensive and not ideal for everybody.

Although that option is still available today, fortunately, the insurance companies realized that it is a necessity for customers to have flexibility in their payment options.

Here’s a look at some of the payment options you have today:

  • Monthly payments
  • Annual payments
  • Quarterly payments
  • Semi-Annual payments

These are the standard options you are given for paying your car insurance premium. The best way to look at the payment options is, the more money you can pay at once, the more money you will save all around.

Now, if you’ve had some history of not paying your premiums or you have a less than stellar driving record, the insurance company could label you as a high-risk customer. In some instances, you could even be required to pay your premiums up front.

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Advantages and Disadvantages of Paying Quarterly

Quarterly payments mean that you will receive a bill once every three months. Paying your insurance quarterly can be looked at as the middle ground of the payment options that are available.

It’s not hitting you with an exceptionally large expense all at once, and you still may have the advantage of saving some money.

As with paying installments in any plan, you will have some administrative fees calculated into the cost of your premium.

Paying quarterly is not as advantageous as paying annually or semi-annually, where you may see up to a 20 percent discount off your total premium.

Because it’s something that you pay every three months, or in other terms, four times a year, it can be easy to miss a payment without meaning to.

Consider setting up an automatic payment plan so you don’t have to worry about missing a payment.

Saving the Most

It is important to shop around for insurance every six months. As your circumstances change so does the way the insurance company looks at you.

By comparing rates on a regular basis, you could be saving money as well as considering your coverage options.

Even if you don’t have a great driving record, there are a number of actions you can take to try to lower your auto insurance premiums and possibly save yourself and your family hundreds of dollars a year, such as paying a higher deductible or taking advantage of good driver discounts.

Overpaying for car insurance is a situation you don’t want to find yourself in, but you should always use caution when looking for inexpensive insurance.

When you have a claim you want to be dealing with a reliable company that won’t leave you in the dark.

While paying quarterly may work for others, it may not work for you. The worst thing you can do is to reach your billing due date with a high payment that you can’t afford.

No matter what payment plan you set up with your insurance company, make sure it is something that compliments your everyday lifestyle.

Enter your zip code in our FREE tool below to start comparing car insurance rates now!

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