A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years Leslie Kasperowicz

UPDATED: May 6, 2022

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Here's what you need to know...

  • Most car insurance companies offer monthly payment plans
  • Monthly payments can be made online by using a debit or credit card
  • Most car insurance policies are written for six months
  • A comparison tool can help you find an auto insurance policy that better fits your budget

Car insurance is designed to protect you against certain types of financial loss if you are involved in a car accident. Most car insurance policies are paid a month in advance.

At the beginning of your policy, you will pay your car insurance company your first month’s premium in advance. This payment schedule helps ensure that your car insurance is up-to-date and valid until your next payment date.

Don’t pay more for insurance than you need to. Enter your zip code into our FREE comparison tool to find the best price with coverage that’s right for you!

How are car insurance premiums paid?

Car insurance premiums are either paid per month or per policy. Each car insurance policy is typically written for six months, and most car insurance carriers will allow you to pay your entire premium up-front, or they will work out a monthly payment arrangement with you to make the policy more affordable. You can also pay twice a year, at the beginning of each term. Six-month plans allow auto insurance providers to raise the cost of insurance twice a year.

When you pay your monthly premium, your policy is paid up-to-date until your next payment is due. If you miss a payment or are late, your insurance company may opt to cancel your policy.

Monthly payments offer some benefits to drivers who can’t afford to pay a huge payment once a year. These payments typically come with an installment fee to cover the cost of the company handling twelve payments each year rather than one. This type of plan may offer more flexibility compared to paying the annual costs of insurance.

Note that the more frequently you pay, the more your coverage is likely to cost due to higher premiums, fees and penalties.

If you are worried about not being able to afford your monthly insurance premium, you can use a comparison tool to find a policy that better meets your budget while providing you with the insurance coverage you need to be able to drive legally.

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What are the benefits of paying for car insurance monthly?

There are several financial and personal benefits to paying for your car insurance on a monthly payment plan versus paying your entire premium up front, which may be good if you have a unique occupation or pay schedule.  One of the biggest benefits is knowing when your car insurance is due each month rather than waiting for your insurance carrier to notify you by mail about your entire premium payment.

  • More affordable for most individual and family budgets
  • You can set up automatic payments by using a credit or debit card
  • Most insurance companies have web portals where you can review and pay your monthly statement

What happens with late payments?

If you choose to pay your car insurance monthly, it is imperative that you pay your premiums on time.

The number one reason most car insurance policies are canceled if for nonpayment or for making multiple late payments.

Most states, like Illinois, list the reasons your car insurance policy may be canceled by your insurance company.

If you notice that you cannot afford your monthly payment, or you will be late for a few days, it is best to contact your insurance carrier and discuss your options.

If you find that you habitually cannot afford your car insurance payments, you may want to look up available insurance policies with a comparison tool to find one that better meets your monthly budget constraints.

  • Monthly car insurance payments must be made on or before your due date
  • Late car insurance payments can result in the cancellation of your policy
  • A comparison tool can help you find a more affordable car insurance policy

How to reduce your car insurance premium?

  • Raise your deductible – Some types of car insurance policies require deductibles. By taking on more of the financial responsibility for future accidents, you are reducing the risk of your insurance company.
  • Ask about relevant discounts – There are discounts available for safe drivers, cars with certain safety features and individuals who have multiple policies or cars insured by the same company.
  • Research Other Policies and Carriers – Different insurance companies have different insurance rates because they use different formulas to assess driver’s risk. Using a comparison tool can help you quickly find other policies from various insurance carriers that may be more affordable and offer better coverage than your current policy.24
  • Reduce your insurance coverage – If you own your car or drive an older car that is paid off, it may be beneficial for you to reduce your insurance coverage. Switch from a full-coverage policy to liability coverage or by adjusting the maximum amounts your auto insurance company will pay out if you are in an auto accident.

However, it is important that you take steps to avoid making late payments. If you find that your car insurance payment is too high, you can quickly compare new insurance policies using a comparison tool.

Enter your ZIP code below to compare car insurance company rates.

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Is car insurance paid a month in advance? The Bottom Line

Is insurance paid in advance? Yes, monthly payments offer some advantages to drivers who cannot afford to pay a large one-time fee.  Payments typically come with an installment plan to cover the costs associated with making twelve payments per year instead of one. A monthly payment plan might be more flexible and easier to manage than an annual one.

Comparison tools for car insurance allow you to input your personal information along with your driving habits and preferred types of policies. The tool then returns the results that most closely match your needs.

Quickly research multiple insurance policies in order to find the car insurance that best meets your personal needs! Enter your zip code into our FREE comparison tool to get started!