Paying Your Premiums: Tips and Advice

What is an auto insurance premium?

A premium is the money you pay to your provider monthly or semi-yearly to buy and maintain your policy.

Keep updated on what you owe

It is important to keep track of when your policy ends and needs renewing. Auto insurance companies should send reminders to their clients, but being aware of when your policy is up for renewal gives you a chance to consider your policy's benefits and determine whether you need to upgrade your plan. Companies can also change your premium at any time, so keeping tabs on the due date is a good idea.

Pay your statement on time

Paying what you owe on time is perhaps the best piece of advice anyone could give you concerning your rates. Providers can and may cancel your policy for just one delinquent or missed payment. If your coverage lapses and you get into an accident, you will not be covered. Late and missed payments also adversely affect your credit rating. Also note holidays on which banks and the United States Post Office is closed, and plan accordingly.

Keep a clean driving record

Insurance companies may increase your rates for reasons of their own, but at-fault accidents, a collection of speeding tickets, and other traffic law violations will certainly cause a hike.

See yourself as a statistic

Costs are calculated more by using statistics than your individual driving record. Realize your age and vehicle directly affect your rate. Your youth and affinity for sports cars may earn you a higher rate than your older, Volvo-driving counterpart. Statistically, you're a higher risk. The newer and more expensive the car, the higher your costs. If your income supports the higher premiums, great! If you can barely afford to buy that shiny new toy, you may not be able to afford the coverage on it. Invest a little time in shopping around for good rates or investigating the possibility of a premium hike before you make your exciting new purchase. This even applies for auto refinance rates if you already have financing for your current automobile.

Consider your payment method

Because paying your statements on time is so important, you should take a closer look at your payment method. Paying bills with traditional checks is gradually becoming obsolete in the increasingly electronic age, but many do still mail off checks to pay bills. If you opt for this method, you should pay attention to the address on the return envelope your providers enclose. If your payment will be delivered to an address in another state, you should plan accordingly. You'll need to know how long it takes mail to reach its destination. In most if not all cases, your funds must be received on the due date. You may choose instead to submit your payments online directly through your bank (this may not be an option with all banks). Note that not all transactions are administered the same day, so you will need to be certain of the delivery date. If you have a difficult time remembering to make payments or travel frequently, automatic withdrawal from your bank account may be the smartest option for you.