All Your Burning Questions Answered About Cheap Monthly Car Insurance
Don’t you agree that auto insurance is confusing and expensive?
Of course, especially if you must pay a full year’s worth of premium. Even if you can find an agent, who will cut it in half, six months of the premium is a lot to pay in one lump sum.
Here’s the good news:
Monthly car insurance is available and easy to find.
In this post, we are going to show explain how 1-month car insurance is available, and where to find. You won’t need to shell out hundreds of dollars for future coverage, and you can easily find pay as you go monthly car insurance.
When most people are looking for monthly auto insurance quotes, they are thinking about two different options.
Let’s discuss both.
A Monthly Car Insurance Policy
Insurance companies will typically issue policies in 6 or 12-month increments. Occasionally you can find companies that will issue a 3-month car insurance policy, but they are rare.
The one-month car policy is incredibly rare to find. Years ago, companies would issue policies in one-month increments but changed due to consumer demand.
One of the latest companies to issue insurance policies every month was Dairyland. They still may exist in some states, but it will be hard to find. Customers didn’t like it.
Why didn’t customers like the monthly policy?
Because insurance companies like to raise insurance premiums, when you have a 1-month policy, you are contracted with the company based on that single monthly premium. When the plan renews, companies can increase rates. Customers often saw their policies increase every month.
Due to demand, companies stretched out their terms to 6-month car insurance policies and eventually to 1-year plans. The benefit of buying a more extended policy is you can lock-in your rate for a prolonged period.
But there was a problem!
Most people didn’t want to pay six months or a year’s worth of premium at one time. Customers demanded something different, and insurance companies listened.
A Monthly Car Insurance Payment Plan
When customers asked for lower auto payments, the first step was to create quarterly or 3-month billing cycles. This solved part of the problem but made budgeting difficult for most people.
Some companies began experimenting with bi-monthly billing which was better, but not ideal.
Eventually, they introduce the monthly billing process.
There was only one problem – payment processing was expensive, and companies didn’t want to chase down cold checks. Mailing checks could also delay payment as well. Their solution was to offer monthly billing, but require large down payments to get policies started.
Today those problems don’t exist.
With the advent of billing technology and instant access to funds companies are more willing to not only offer monthly payments, but they will do it with no strings attached.
Large down payments are a thing of the past. (If someone requires one, get a quote with us, and we can find multiple no-down payment companies).
Plug your information into our quoting system, and we will find you a low monthly price that will fit every budget.
Frequently Asked Questions:
Can I cancel my car insurance if I pay monthly?
Most companies will allow you to cancel your insurance at any time. This doesn’t mean you won’t owe money. If they have provided coverage for days where you have not paid, they will pro-rate that amount and bill you after you cancel. The insurance term for this period where your premium covered you is often referred to as “earned premium.”
Some companies will charge a cancellation fee if you cancel within a specific time frame. For example, if you’ve only been insured for two months and decide to cancel there may be a cancellation fee. The cancellation fee can be a flat amount such as $50 or a percentage of the earned premium.
Should you pay car insurance monthly or yearly?
You will get a substantial discount if you pay your car insurance in full. Some companies will even give you the yearly paid in full discount if you pay in six-month increments.
With many companies, the paid in full amount discount is so large, it might be worth to even pay with a credit card. You could afford a month or two of interest and still come out ahead.
For most people, paying month to month car insurance is much easier to budget. If you pay in full, you still need to budget for the next renewal. The difference is that you will be paying yourself during that time rather than the insurance company.
Many companies have created discounts for a 30-day payment plan if you set them up automatically. The discount is not as steep as the Paid in Full discount, but it is still significant. You can set up automatic payments via electronic withdrawal from a checking account or reoccurring payments with a debit or credit card.
Besides the discount, the benefit of the automatic payment is your insurance will always be in force. Forgetting a bill or being late could cause a lapse in coverage and create a premium rise at your next renewal.
How much is the average monthly cost of car insurance for a teenager?
First, why do teenagers cost more than adults? Statistically, they are worse drivers. Anyone who has been a parent of teens or just observed driving behavior on the roads knows this.
They don’t have the experience to protect themselves and others when unexpected driving situations arise.
Also, within the last couple of years, distracted driving due to electronics has made teen driving dangerous. Teens are also on the road for a more extended period and driving more expensive cars.
All those factors cause high premiums for teenagers.
So, what can you expect to pay for teenage insurance?
The nationwide monthly car insurance for full coverage for a teenager is around $432.
Parents and teens can cut this cost by shopping their insurance. Opting for liability only for teens can lower the pricing. Also, there are multiple discounts available for teens such as plug-in tracking, good grades, and even drivers training.
How much do you pay monthly for full coverage?
Most people ask for full coverage but don’t know what this means. So, don’t feel bad if the terms confuse you.
Full coverage is a combination of collision coverage, comprehensive coverage, and liability. Collision covers your car if you run into something. It will also pay damages to your vehicle if someone hits you with no insurance (uninsured) or not enough insurance (underinsured).
Comprehensive (sometimes called Other than Collision), covers all other damages to your vehicle that’s not a collision, for example, glass damage, animal collision, theft, vandalism, weather-related damage like hail, etc.
States with mandatory insurance laws don’t require full coverage, only liability coverage. However, if you have a loan on your vehicle, the lender will require full coverage. They are protecting their investment.
For full coverage on a middle age with a 2013 Ford Fusion, you can expect premiums to vary by insurance. Here are the nationwide monthly averages for the most popular insurance companies:
Liberty Mutual $123
State Farm $125
Remember, insurance is highly variable based on age, sex, vehicle, and especially where you live. Because pricing can be so variable, it pays to shop your coverage.
How much is liability car insurance per month?
Liability is much cheaper than full coverage because you are not covering damage to your car.
Liability only covers damage you do to another person or their property. All states mandate liability insurance; however, the limits of liability may vary by state.
The most common liability limits are 25/50/10. These numbers mean you are covered for hurting an individual up to $25,000, but no more than $50,000 for all injuries regardless of the number of people. Any damage you do to the property will be covered up to $10,000.
Below are the average monthly car insurance costs you can expect to pay for minimum liability coverage in various states:
New York $135
Liability is the cheapest portion of auto insurance and maybe the most important. Consider carrying more than the state minimum. To increase coverage from the state minimum to 50/100/50 will only increase your premium 2-8%.