Most people have no idea what the price tag will be when they begin to shop around for car insurance. Sometimes you’ll be pleasantly surprised with the amount asked by insurers, but then there are other premiums you’ll find shocking.
Because there is no set price for every driver, what a person will pay to cover themselves and their car will vary from person to person because insurers have a formula that they use based on the drivers driving record and the vehicles to be insured; since everybody’s situation is unique, the cost of a policy can vary substantially with each company.
When looking to see how much car insurance does cost it is important to understand what an insurer is analyzing to determine premiums. Probably the biggest factor used to calculate a premium is your driving record; this is a big indication of your driving habits and your likelihood to be involved in a loss and ultimately cost the company money . Therefore, if you have a history of tickets and accidents you will probably pay more in premiums than those that do not because you are viewed as a higher risk to insure due to your previous incidents.
Other Factors that Affect the Cost of Insurance
Aside from your record there are many additional factors that will reflect what you will pay for your car insurance. For instance, age plays a big part because the ages of people are broken down into groups and each group has a certain level of risk associated with them. If you are under the age 25 you are considered to be a “younger motorist” and will likely pay more for coverage than mature driver This is especially true for teenagers; statistics show that motorists between the ages of 16 and 19 are four times more likely to be involved in a traffic accident than older drivers and 16 year olds are three times more at risk than 18 and 19 year olds.
In addition, another factor that may play a part in the cost of a premium is gender which statistically show males more involved in collisions than females; mainly because they can be aggressive behind the wheel.
Where you live can also affect rates due to the fact that if you live in an area where there are a lot of vehicles occupying the roadways, the chances of an accident increases; place of residence can also raise premiums if there are high crime rates. The automobile to be insured will also determine a rate; the main reason is because if a vehicle is more expensive to repair or replace it will cost more to insure.
Another factor that many states allow insurers to use to calculate your prices and in some cases even deny you coverage is a your credit score. Companies believe that a person’s habits when it comes to paying bills on time have a direct correlation with the chances of them being involved in an accident and have even gone so far as to have done research to support this belief. Not all states allow for this, but if you live in a state that does you should ask how it is allowed to be used. I’ll explain this when we get together or possibly in another blog posting.
You can reach me at www.SteveBedgoodAgency.com or if you need help in Michigan you can call me at 1-888-365-7553.
Just about every state in the country requires you to have compensation in place for property damage that you may cause with your vehicle and either bodily injury liability for injuries caused to others and/or Personal Injury Protection (PIP) to pay for an injury suffered by the policyholder regardless of who is at fault. States will enforce these laws which are known as the Financial Responsibility and No Fault laws. Although there are a few different ways to satisfy these laws such as making a cash deposit with the state or obtaining a surety bond for a specified amount, most drivers choose to purchase auto insurance and maintain coverage through an insurer.
Although not all states require it, it may be a good idea to always carry proof of car insurance at all times while operating an automobile. If you are involved in a traffic accident you will need to swap policy information following the incident so having the documentation readily available can make it a whole lot easier and faster to go through the claims process. In many states it will asked for by a law enforcement officer upon arrival at the scene of the collision and in many cases not having proper proof will give the officer the impression that you do not have coverage which may result in a fine and a “need to appear” in court with the documentation necessary; both of which can be avoided by simply carrying that piece of paper.
Additional Information about Proof of Auto Insurance
When you purchase an automobile policy, the agent or his representative should provide you a temporary proof of insurance as soon as the transaction is complete and the finalized documentation should be mailed to your residence. On the identification cards most states require that particular information is stated on the documentation; in most cases states require that the cards show the name of the insurer, a policy number, the effective date and expiration date of the coverage, your name, a description of the year, make and model of vehicles including the “VIN”. It is the responsibility of the policyholder to ensure that all information is correct.
You should make yourself aware of whether or not you are required by law to have proof on you at all times while driving because fines can get quite expensive and become a hassle if you are caught without the proper documentation (even if the state does not require identification cards to be carried it is probably a good idea to do so anyway.) States which require you to have policies you at all times will allow law enforcement officer to ask for identification cards at routine traffic stops and if unable to furnish the driver can be cited. According to the Washington State Department of Licensing those who are caught operating an automobile without coverage can be given a fine of at least $450 which can be close to the amount it would cost to purchase a policy. It would be wiser to always have the documentation ready and never risk driving uninsured.
“Apples to Apples” comparisons are what most people believe they want when they are shopping for Home Insurance. The idea is good. People want to make sure they are getting at least the same coverage they had when comparing policies.
At the Steve Bedgood Agency we start by making sure they have good apples to start with.
More important than just comparing one policy to another, we need to compare what coverage they have to what they actually need should they experience a loss.
For example, with the housing market being the way it is, people are bragging about the “good deals” they are getting on homes. It is a definitely a great time to buy a home. However, a person insures the home for just what he bought it for, he won’t be able to rebuild his home for that low price.
Liability is another area where people could be underinsured. So rather than just trading your policy for another, cheaper one, let’s make sure you really have everything covered that you feel is important to cover and cover them for the proper amount.
As an agent, there is a concern I have that other agents may not worry about. That is, if the home or car isn’t insured properly, it’s me the client will be calling, personally. It’s in my best interest to do the job right for my clients the first time and every time.
If you would like to make sure that you have your home insured properly, feel free to give me a call at (231) 744-9099 or start by a visit to www.muskegonhomeinsurance.com.
When browsing around for the best deals for your car coverage, would your best bet would be to use the internet? It’s easy to find and buy auto insurance online if you’re looking in the right places. There are various comparison websites that you can use to find and compare auto insurers around the nation. But, before deciding which company to buy an insurance premium from, consider this; who are you going to call if you have a claim? Also, do you know enough about the types of coverage to feel comfortable that if you have a serious accident that you’ll be covered?
At the Steve Bedgood Agency our clients tell us what they have and how important to them it is and well help educate them on how best to protect it. (and themselves)
Getting the Best Rate
In order for your to get the best rate possible for your vehicle coverage, you will need to learn about the process. There are various ways we can save you money on your premium. For starters, when you are deciding what type of coverage to purchase, you have to select the amount of limits you want to purchase for your bodily injury and property damage protection. It is up to you to decide how much you’re willing to pay out of pocket. ( your deductible) The higher you place the limits, the lower you have to pay monthly for your car insurance policy. If you feel more comfortable paying a little more money, then you can lower your deductible, so that you have less to spend out of your pocket if you’re the cause of an automobile collision. Farm Bureau Insurance of Michigan offers various discounts as well. If you have a student away at college they could get a reduced rate for their auto insurance premium.
Other discounts are available for bundling multiple vehicles on one coverage policy. That’s why it’s important for you to come in and spend a little time with us. Never assume that your current insurer has the best deal.
The type of vehicle you buy or own plays a role in your premium. Vehicles that are considered high risk include high performance and sports cars. It costs more to insure these types of automobiles because they are more known for getting broken into and stolen. Then where you live can be a factor. That’s why we like to step our clients through the process.
Other Factors that Determine Your Coverage Premium
Your age also plays a role in the estimation process. The younger you are, the more you have to pay for coverage. Drivers between 16 and 24 are considered higher risk because they are known to drive more risqué and are involved in more automobile collisions. We have a few steps down in premium for young drivers who obey the law. Once you reach the age 25, your rates decrease for car insurance coverage. Then later in life, you may become a high risk once again — around the age 75, which is when you begin to lose your mobility, reaction time, eyesight and hearing. Some states require a test to be taken in order to make sure that the elderly are still capable of driving around safely.
Type of Coverage to Choose
The next thing you need to consider is the type of protection you want to purchase for your auto. Do you want the most protection or are you looking for the least, so that you can save money? . Be careful because even if the state says what the least amount of protection you can buy, you could still be underinsured. This means that if you’re involved in a car crash, you might have to pay for the additional costs out of your piggy bank. We’ll help you buy enough coverage to ensure that you get the enough benefits to cover the expenses associated with vehicle damages and bodily injuries.
Other types of protection available are underinsured/uninsured motorist coverage and comprehensive and collision benefits. Having the underinsured/uninsured protection will ensure that you get money for the damages caused by a driver who doesn’t have sufficient coverage to handle the expenses. Comprehensive offers protection for natural disasters, vandalism and theft. Then for the collision protection, you will receive benefits to cover damages to your vehicle in an accident that was your fault.
Now that you have a better idea of how we may serve you, you can begin the process of finding the Car Insurance. Take your time to meet us in person. Give us a call at 231-744-9099 or start by visiting us at www.muskegonautoinsurance.net.
You’re looking around for cheap car insurance, but where do you start? The internet is a window to hundreds of auto coverage providers around the nation. Knowing where to start and knowing where to look is very important because it will help you to find the car insurance quicker. For starters, there are various comparison websites that can help you find auto average easily. However, it may make more sense to simply go to a local agency like the Steve Bedgood Agency. A few good reasons are; It’s usually good to get to know an agent. Over the years, you’ll insure a home or two, several cars, perhaps your life, your health and perhaps your children. With so many decisions about your family’s future, does it make sense to just dial a 1-800 number and let whoever answers the phone help you. Chances are, the next time you call that number you won’t be able to speak the same person. Secondly, when it comes right down to it, how much do we know about insurance. If your home burns down or your car gets totaled are you going to feel comfortable that you’re protected?
Looking for Affordable Coverage
It isn’t too hard to find a great deal when you stop by our office. There are a lot of different insurers out there and if you already have the best deal in town, we’ll let you know. With online comparison websites, you can get free online quotes instantly. This makes the process of finding the best deal and purchasing a premium simple, but that doesn’t mean you know what you have.
Be weary of websites that are out to scam vulnerable car insurance shoppers. They are looking to steal your personal information to be used for identity fraud. In order to ensure that you’re not being taken advantage of, don’t deal with websites that ask for your social security number and driver license number. This information shouldn’t be revealed until you’re dealing directly with the car insurance provider.
Types of Premiums Available
There are different types of coverage options available to you, so make sure you look through the benefits offered to see which of them are best for you, your budget and your current situation. Of course, everyone is looking for something affordable, but it’s important that you get your money’s worth with sufficient coverage for your vehicle. You don’t want to be caught in a situation where you are underinsured. If your car insurance policy won’t cover all of the expenses, you will have to come out of your own pockets to pick up the slack. If you’re looking for the lowest possible rate, you could set your liability limits at the minimums your state requires but I wouldn’t recommend it. This is the least amount of coverage that you can purchase to legally drive around. But liability is one of the least expensive parts of the policy so the few dollars you save on it isn’t worth the thousands it can cost you. Keep in mind that some states set their minimums very low — so low that it doesn’t completely cover the expenses of an auto collision.
With this in mind, you should look into getting enough coverage, instead of getting the lowest amount of coverage. Protect yourself financially, so that you won’t face a financial ruins in the future. Then to further help protect you, consider protecting yourself from others who are underinsured or uninsured. With underinsured/uninsured motorist coverage, your insurer will pay you the money for the damages caused by the motorist that is uninsured or is without sufficient amount of protection to pay for your injuries and vehicle damages. It could take years for you to receive money for the expenses, so if you have this type of car protection, you won’t have to worry about this. Your automobile insurance provider will pay you the money owed and then wait for the other motorist to pay them.
Those who are looking for full coverage can get comprehensive and collision protection for their vehicle. This will guarantee that you get all the benefits possible if something were to happen with your car. It’s good to combine this with the underinsured and uninsured motorist option. With comprehensive coverage, you won’t have to worry about your vehicle getting stolen because you can get another if your vehicle is never recovered or if it is totaled when it is found. The provider you are insured with will give you the money your automobile was valued at — sometimes this is paid out to you and other times the car insurance company will buy you another vehicle that is worth the same amount of money and that is similar to the car you were driving. Comprehensive benefits also cover vandalism and natural disasters, including floods, fire, high winds and falling objects. Make sure to check with the premium provider you’re dealing with to see what benefits are definitely included.
With collision protection, you will receive benefits for the damages done to your vehicle, self and passengers due to an accident you caused. So instead of getting just enough protection to cover the expenses for the other driver, you will be covered as well. Some people just settle for state minimum requirements and PIP (Personal Injury Protection). Make sure that you’re getting enough benefits to secure you financially.
Avoiding Online Scams
Make sure to protect yourself while looking for cheap car insurance. Unfortunately, with all of the advantages that are available online, there are also a lot of disadvantages. It is easy to mask who you are and pretend to be something you’re not, especially since there is no face-to-face contact. A lot of the time, you won’t even get a direct contact number. In order to secure yourself from websites that are looking to collect as much information about you as possible, avoid them. Don’t deal with websites that are asking for too much information. At the Steve Bedgood Agency we perfer to meet you face to face. If you are unsure about a specific car insurer, you can look at consumer websites like RipOffReport.com and the BetterBusinessBureau.com. Both are known for collecting reports from customers who deal with different companies. The BBB collects good and bad reports and RipOffReport only collects info that is negative about businesses. Together, you should be able to find out the things you need to know about a coverage provider. Of course, there are also other websites that can be used to find out about a particular agency.
We know citizens of Michigan are doing their best to abide by the state law and carry the required amount of auto insurance. We also know they are trying to find ways to cut back on expenses and save money wherever possible. Perhaps the suggestions below can help the drivers in Muskegon, Michigan not only save money on their policies but move forward in their understanding of car insurance and get closer to full coverage.
Can I Save Money On Required Liabilities?
State legislation has declared a minimum requirement of coverage that must be purchased by every driver on the road, which is personal protection insurance for $1 million, personal injury protection, residual bodily injury for $20,000 per person and $40,000 per accident, and finally $10,000 in property damage liability. Combined, these mandatory coverage types will pay for the other party’s property damage, their medical bills, and your medical bills. There is no way to lower the amount that is required to be carried because it has been said as being mandatory by the state. Drivers who have carried higher amounts of these coverage types can lower their amounts to these stated minimums to help save money on their premium, but in the long run it may cost the driver more to pay less now and then in an accident situation pay out of pocket for expenses no longer covered. This thought should also be heavily considered when thinking about only carrying the state required amounts and nothing more to try and save money.
What Coverage Is Necessary For Mi. Drivers?
As mentioned earlier, if you live in Michigan you must purchase personal protection insurance, personal injury protection, residual bodily injury liability, and property damage liability. Any other coverage is extra and can be added on to the policy for a price.
What Coverage Is Available In Michigan?
Each insurer in Michigan offers different coverage options so it’s best to check with your current insurer or prospective insurers (perhaps the Steve Bedgood Agency) to see what is offered. As a general rule of thumb, most insurers offer coverage types that will give the policyholder and members the ability to expect the insurer to pay for their accident related medical bills and property damage. There are also other add-ons that will cover rental cars or help with paying for a rental car when your vehicle is in the shop because of an accident. Options regarding towing services are also available. Figure out what you coverage you need to properly protect your assets and policy members, know your budget, and decide what coverage you can afford.
Where To Find Good Car Insurance Coverage
The best place to find coverage for Michigan drivers at a good price is right here at the Steve Bedgood Agency. All drivers in Muskegon can utilize our service. We can show you what prices we are charging and help you get your discounts. Anyone interested in finding a great agency with one-stop service should come visit our office.
We are located at 1500 Whitehall Rd, Muskegon, Mi. 49445 or you can start by checking us out at www.muskegoninsuranceagent.com
To begin this process, start by e-mailing me at steve.bedgood@fbinsmi.com. We’ll need to know the local zip code, basic information about the driver, your vehicle you would like to purchase insurance for, and the type and amount of insurance to be added to the policy. Knowing this information beforehand will help the answering process go very quickly. To help the you prepare, we’ll go over a few things that will be asked.
Information about you will probably be the easiest to obtain, especially if it’s you who is answering the questions and not another person. We need to know things like your name, age, address, and most importantly your driving history. For the vehicle, we’ll need the VIN, estimated annual mileage, and possibly the condition of the vehicle. The coverage that is wanted will be in addition to what is required by the state. There is a list of options the applicant can highlight and include the amount you would like to purchase as well. For more information about what these options entail, you can search through more of our articles found on this site.
Once the answers have been entered and the entire application submitted, the driver will be given a list of quotes from insurers. That’s right, the driver answers one set of questions and in return is given a number of quotes. We claim this is the fastest and easiest way to gather quotes, especially when compared to contacting each individual insurer, asking each representative the same question, and then moving on to the next company. You can compare the prices and the companies on the list and if desired, purchase a policy directly from the quote page. This process is also less intimidating that traditional methods of speaking with representatives who can sometimes be pushy.
How To Save Money
The best way to save money on a car insurance policy is by taking advantage of the discounts that are offered by Farm Bureau Insurance, after you’ve made sure your coverage is adequate. Driving an insurance friendly vehicle will also help Michigan drivers save on their insurance. Getting smart and sometimes creative can help your premiums stay low, which is important so every driver can afford a good car insurance policy.
Now that you know what is needed for Michigan auto insurance, where to find it and how to save on the premium, there is no excuse about not having car insurance. Because it’s a state law that all drivers have insurance, you should do everything possible to get that insurance and try to make it fit into your budget. The Steve Bedgood Agency is committed to helping people get there by seeing them one-to-one and giving them the personal attention they deserve.
Drivers who are satisfied with their automobile insurance company will often assume they have “the best” company in the business. They are happy with the price they are paying and feel their coverage is adequate. However, many car owners stop there and don’t look further into their provider to find out whether or not they truly do have “the best” car insurer out there. They omit checking to see what other companies are offering to their customers, such as more coverage for a lower overall price. Past the final cost of the premium, drivers should look for other things about their car insurance company before declaring them as the best choice.
How are their finances?
Have you checked into the finances of the car insurance provider for your vehicle? It’s no secret that the current economy isn’t allowing for many companies to do well. Even some of the more popular companies throughout all sectors are barely hanging on. Now is as good of a time as ever to look into the finances of the insurer who claims they will insure your vehicle, especially before the time comes where you may need to file a claim. There have been instances where drivers get in an accident and file a claim with their auto insurer, only to discover their insurer does not have the money to pay up as once promised. This leaves the driver angry and looking for another way to pay for those damages immediately, particularly the medical bills. Had those drivers known about their car insurance company’s financial strength, they could have switched to a stronger provider before they needed to file a claim to avoid this mishap.
Checking out the financial strength of an auto insurance provider is relatively simple and doesn’t take much of the driver’s time. If you think you will need to contact the insurer to get this information, think again. There are third party companies who go in and evaluate car insurance companies to determine how strong they are financially. Each company has their own ranking system and gladly shares their findings with the public. The companies who are providing the rankings are trusted companies who have been performing these evaluations for some time.
There are three known companies we’ll discuss today that will give out their findings of which insurance companies are strong and which ones should be avoided. The first is AM Best. They are adamant about sharing who is “Secure” and who is “Vulnerable” in their finances. This is determined by their giving each company a letter grade, much like in school. Any company receiving a letter grade of B or lower is deemed as vulnerable to financial failure, but this does not indicate that AM Best knows the insurance company is going to fail. It implies that based on the car insurance company’s current finances and the way they are handling them they are susceptible to a possible failure. Companies who receive a letter grade of B+ or higher are secure, meaning they are likely to remain financially strong for the next while according to their current finances.
A second company that will evaluate the financial status of car insurance companies is Weiss Ratings. Each quarter, Weiss Ratings evaluates other companies and then will post their findings. Weiss explicitly states they do not accept any money from the companies they evaluate, which makes their findings 100% unbiased. They give out letter grades to the companies they rank, ranging from an A to an E. Receiving an A will indicate the insurer is “Excellent” while an E ranking will deem that company as “Very Weak.”
The third company is Standard and Poor’s. They have been assessing financial strength since 1971 and they also distribute letter grades, beginning with the highest markings of AAA. They offer an interactive guide for their readers to help them understand how to properly read their findings and use them for their benefit.
All ratings from these companies are their opinions based on what they have found in their evaluations. They are not guarantees, only suggestions.
How will they treat you?
The top car insurance companies will go out of their way to help their customers feel like they are the top priority. Speaking with other trusted drivers about how their interactions have been with their insurer can help a driver figure out which company is best, but this can lead to a small group of opinions and make it a harder choice. JD Power is a third party company that evaluates not the financial status of a company like the previously mentioned companies, but they evaluate the customer satisfaction of an insurer. Not only do they assess the way customers are treated by the representatives, but also the way a customer can pay their bill and the overall experience. JD Power will list their top find each year.
What is their cost compared to others?
Price is a huge factor when choosing an insurance provider for your vehicle. It’s almost the top reason why people will switch insurers. However, as seemingly important as this may be, most drivers don’t bother to see what other insurance companies are offering for the same coverage. Farm Bureau Insurance will need to know information about the driver, vehicle, and coverage wanted, which is exactly what would be asked by other insurers if you were to call around and get quotes. We do this face-to-face so we can get to know you and your needs,when the answers have been submitted, we will know we’ve met your needs.
The best auto insurance company is the one that has a strong financial status, great customer service, and low prices. While some companies may only offer two out of the three, Farm Bureau does quite well at all three. Occasionally the financial status and customer service may be top notch, but the price is a little higher than other companies. Some drivers may find this to be okay since they’ll be paying a little more for a better quality company, but only they can make that decision. Know what you want before you purchase a policy for better chances of being happy with the company.
At the Steve Bedgood Agency we strive for excellent service while offering an excellent product at a fair price. Check us out at www.muskegonautoinsurance.net.
When drivers get into an accident, their first thought is often “How much will this cost?” It depends on your insurance company and your state’s laws, but part of that cost will likely be an increase in your auto insurance premium – unless the accident was very minor.
How Likely Is a Rate Increase?
The chance of an increase in premium rises along with several factors:
Accident severity.
Your degree of fault, unless you’re in a “no-fault” state.
The value of the insurance claim you or the other driver files.
Type of violation, if you get a ticket at all.
Whether the violation or accident appears on your MVR or CLUE report.
How Much Money?
Like everything else about insurance prices, the amount of an increase, if any, varies by company. However, based on a 2008 Insurance.com study of the effect a violation or insurance claim has on premiums, the price can be high. Drivers who had an additional ticket saw their rates increase from $157 to $248 a year while those who had an additional claim saw increases ranging from $302 to $458 annually.
When Will It Go Up?
These increases are typically seen at renewal time, but if you didn’t notify your insurance company (please do!) and no one made a claim, it could take awhile for the company to find out. Rest assured that they will not be happy to uncover a ticket or accident you failed to report. If you’re switching companies, they may not find out until they order your driving or claims history, at which time they may decide not to issue you a policy.
Accident Forgiveness
Some insurance companies, including us at Farm Bureau, offer an accident forgiveness feature for our clients. If yours does—and you qualify—your rates may not increase if you’re found to be at fault in a relatively minor accident. However, there could be severe consequences if you’re involved in a major accident and you’re driving under the influence. Remember that there are worse things that can happen than a higher insurance premium, like license suspension and jail time.
MVR = Motor Vehicle Report. Not every traffic ticket actually appears on your MVR. In fact, in some states only 75% of all moving violations are ever recorded on an MVR.
CLUE = Comprehensive Loss Underwriting Exchange. C.L.U.E. is a claims history database created by ChoicePoint that allows insurance companies to access your claims information when they underwrite or rate a policy. The report includes claim information such as date of loss, type of loss and amounts paid, and vehicle description.
Car Insurance can vary widely from company to company. Come see me at the Steve Bedgood Agency and we’ll do our best to get you get you the best policy we can based on your situation.
It is common knowledge that car insurance can be paid for in monthly payments and many companies no longer require their customers to pay for the entire policy up front in one lump sum. But just as in every decision, there are pros and cons to paying monthly versus making a one-time payment. We’ll go over those pros and cons to help drivers make an informed decision that will suit their situation best.
Pros of Paying Monthly
One pro to paying for car insurance in a monthly payment cycle is it’s easier to afford for many drivers. The tight economic status most families are facing these days are forcing even tighter budgets and people searching for ways to cut back on their expenses. While paying for a policy in monthly payments isn’t necessarily cheaper than paying the whole premium, it is more manageable since the high cost is broken down. Paying $150 a month is much easier for many drivers to afford compared to paying $900 in one payment. In theory, a person could save the $150 a month to pay the $900 at once, but often people find themselves unable to keep that $150 untouched.
Another pro to making monthly payments is if the policyholder needs to cancel the policy due to moving or switching to another company like to us at Farm Bureau Insurance. Remember, a driver can only legally cancel a policy under those circumstances. Otherwise, the driver will be without a policy and will be breaking the law by driving without auto insurance or another form of financial responsibility. When a policyholder has already paid the premium in full and needs to cancel the policy, they will have to wait for the insurer to send them a check for the remaining amount of premium unused. However, in monthly payments, the policyholder won’t have to wait for a huge check to be sent since they will only need to wait for the remaining month’s amount.
Cons of Paying Monthly
Paying in monthly payments can have its downfalls as well. For instance, paying monthly means having to remember to pay every month’s payment on time. When the payment is not made on time, a notice is mailed to the policyholder instructing them they only have a few days left before the insurer will terminate the policy due to non-payment. If the payment is not made, the policyholder will lose their coverage. But, if the policyholder makes the payment, the policy will remain in affect. A few ways to make sure the payment is made on time is by writing the due date on a calendar and sending the payment well before that date, or by sending the payment the day the bill is received. Another idea that may help is many insurers and even banks will send reminders of when a bill is due through email. This could be a great help for people who tend to forget things.
A second con to paying monthly is the fees that are needed to be paid. Insurers charge a processing fee each month when a policyholder chooses this form of payment, but there are no fees when the policyholder pays their premium all at once. These fees are usually quite minimal, sometimes ranging from $4 to $10, (Farm Bureau Insurance will waive it’s $5.00 charge if you choose EFT payments) and don’t increase the total payment very much. However, some policyholders may feel spending $48 to $120 a year on fees to their insurer isn’t a wise way to spend money and would rather pay the premium in full to avoid such fees. There is a wide variety of opinions on this matter, and really the only person who knows whether or not the fees are worth paying monthly is the individual policyholder.
Third, many insurers require a policyholder who is making monthly payments to make a down payment first, and then pay the remaining balance of the premium cost in equal monthly payments. For instance, if the entire policy costs $700 for a 6 month contract, the insurer could require a 25% down payment, or $175 for the first month. Then, the policyholder will be charged the remaining $575 throughout the next five months of the policy, paying $115 each payment. At the end of the six month contract, the policyholder will have paid the entire $700. (These numbers are just used as an example; policies vary in price and insurers vary in the amount required for a down payment.) This may be a nuisance to some policyholders because the monthly payments aren’t equal and it’s harder to budget, especially for someone who lives paycheck to paycheck. Do make note that some insurers require smaller down payments, or none at all, which keep the monthly payments the same.
In some instances, it doesn’t matter which method of payment a policyholder chooses. No matter which way a driver pays for their insurance, their contract length will remain the same. Paying month to month does not mean the contract is month to month as well. The contract remains the same throughout the entire policy period and it doesn’t matter if the policyholder paid the premium in full or in monthly payments. Another item that doesn’t change is the total price of the coverage purchased. Buying $100,000 of uninsured motorist coverage will cost the same whether the policyholder chooses to pay in full or in monthly installments. However, remember that when choosing a monthly payment the total price will increase if paying month to month due to the processing fees even though the coverage costs the same.
Paying monthly is easier for many drivers to do when it comes to paying for their car insurance coverage. They prefer it over paying the premium in full because it is less money to worry about when paying bills, and they are able to overlook the cost of the fees. The personal preference of each policyholder will determine which method of payment is best for their family and financial circumstance. When drivers are not sure which method would suit them best, they can always try paying for their premium in monthly installments for one policy period and then pay the premium in full for the next policy period. This will show them the differences and they’ll be able to make a more informed decision. Let the Steve Bedgood Agency help you find the right policy for you. Give us a call at (231) 744-9099 or start at our website, www.muskegonautoinsurance.com.
