Did you know that there are several methods available to pay your insurance policy? Most people would assume that paying in monthly installments is the only way, but there are usually several available depending on the insurance company.
Before we get into any details, there is one gigantic misconception people have when it comes to making payments on your insurance, let’s correct that:
The best way to understand this is to think of your monthly payments in the same manner as financing a car, NOT the monthly payments you make on your cell phone bill.
One thing to note with monthly payments is that there is a small finance fee of 1.3% on auto insurance and 3% on home insurance.
A few other common methods are three-pay and full-pay. Three-pay works by making a 40% payment within the first 30 days, and then two additional payments of 30% at 60 days and 90 days. Full-pay is self explanatory, but what you may not know is that some insurance companies will actually offer a discount for paying the policy in full. Yes, you read that correctly: A discount for paying your insurance.
Another common misconception is that if you unfortunately do not have the funds available in your bank account and miss a payment, that the insurance company can make another attempt when you have the funds available. While most insurance companies will attempt a recollection from your bank account, it is usually within a few business days and the insurance company has no control over it nor will provide notice. There are a few insurance companies who will reschedule your missed payment for either a few weeks later or simply add it to the next month, but this is usually a “once per policy term” arrangement.
One thing that most people are likely not aware of is that insurance companies will send their payment requests to banks anywhere from several business days, up to two weeks. During this time, no changes can be made to the payment schedule – whether it is to push the payment back a few days or to change the bank account itself.
In the event of a payment issue, the best thing to do is call your broker (which is hopefully Absolute Insurance Brokers!) right away to solve the problem. Don’t be embarrassed, these things happen to the best of us. The sooner you call us the faster we can fix the payment problems! Don’t let your payment issues snowball!
If you have any questions about payments or any insurance questions in general, please give Absolute Insurance Brokers a call at 1-877-941-2266 and we would be happy to assist you, at no charge!
