How do you pay your car insurance?

[Coolface Sock #42069]

Every six months. I just did. If you pay monthly you're either poor or can't do math. (Or your company doesn't offer good paid in full deals)

As an insurance agent for 35 years, you're a bit too narrow here in your thinking, Red.

Even with a huge paid in full discount that companies like Progressive (we represent them, I know) have, every company rates different factors with different weight.  My company insures my two cars and home together and I pay monthly on both policies.  I get a huge multi policy discount which offesets Progressive's paid in full.  My company does not charge service fees for the automatic pay plan either.

People like yourself with one vehicle and maybe a renter's policy might very well get a deal using a paid in full program, even some with conditions like mine it's worth it, but it's not always the case.

As a pricing actuary (who prices auto, homeowners, renters, and condo insurance, I'd just like to note that every company I've ever seen gives discounts for paying every six months. They're usually pretty substantial. You could still get that discount on top of your multi-line discount. Companies want your money up front so they'll be able to get more investment income from it before they have to pay it back out, and so they will usually pass that discount on to you.

the rates are calculated for 6 months, it's then divided by 6 and I pay that each month.  I assumed that was normal...it's not?  I don't THINK I'm paying more for this feature, but I could be wrong.


edit-FYI, State Farm, full coverage on a 08 Mazda CX7 and liability on a 97 Miata (just two adult drivers). Plus term life for me at 500k and the wife for 100k all adds up to 140ish a month.  Most of it is the full coverage on the SUV.

Well Progressive charges less if paid in full for six months instead of the monthly.

Yeah, here's how it works (for auto):

Your rate is calculated as a 6-month rate. Somewhere in there, a factor is applied for your payment plan. If you pay monthly, that factor might be 1. If you pay every 6 months, it might be 0.9.

Then, at the end, if you pay monthly, the rate is divided by 6, if you pay annually, it's multiplied by 2, etc. If there are service fees, these are charged upon payment and are not part of the rate.

[Coolface Sock #42069]

As a pricing actuary (who prices auto, homeowners, renters, and condo insurance, I'd just like to note that every company I've ever seen gives discounts for paying every six months. They're usually pretty substantial. You could still get that discount on top of your multi-line discount. Companies want your money up front so they'll be able to get more investment income from it before they have to pay it back out, and so they will usually pass that discount on to you.

Absolutely, but other discounts may outweigh paid in full discounts.  My company's paid in full is nice but not as good as Progressive, but I have two cars and house so I get a huge multi policy discount and I can't afford to pay both in full.  It's still cheaper than splitting them to two companies where I can pay the auto in full

Paid in full is excellent but I retain more customers who are on an automatic pay as they tend to shop less and the payments are easier to make.

Oh, I see what you're saying. Yeah, automatic-pay people seem to retain pretty well for the most part.

Never thought I'd get into a discussion about insurance pricing on Atlas.

[Coolface Sock #42069]

Every six months. I have the option to pay for a full year but there's no additional discount for that, so don't really see the point.

There is no point.

[Coolface Sock #42069]

Once every six months.  Mine is also less expensive if I pay it every six months.  I wish they had an option every 12 months.  The registration is every 12 months.  The inspection is every 12 months.  It's silly to have insurance every six months.  What a hassle.

How can they raise your rate in 6 months if they lock you into 12?  They may not necessarily raise it, but it will happen more often than not.

If your policy's renewal date is after the effective date of a rate change, your rates will change. It's that simple. Usually (but not always), this results in your price going up by 0-10%, though rarely they could go up by more than 10% or go down.