How you pay your premium can save you money.
It’s different for personal policies than commercial.
Many personal auto insurance companies consider how you want to pay your premium in the total cost of the policy. Some companies can give up to a 20% discount if you pay the premium in full. Automatic monthly installments also saves you money but not as much. Ask about your different options before you purchase your policy. You’ll be surprised how the premium savings will be different in your different payment options.
Payment discounts are not offered by homeowners insurance companies but they do charge installment fees that can be saved if paid in full. Also homeowners policies are often paid through your mortgage escrow account.
Commercial motor vehicle insurance companies offer similar paid in full discounts as personal policies. The discounts are not as deep.
Some commercial policies are not paid directly to the insurance company. This means in order to pay the premium in installments you have to finance the premium with an outside premium finance company. Premium finance companies pay the premium on your behalf and you pay them back in installments. Paying the premium in full saves the finance charges.
Carriers who collect the premiums directly (direct bill) can also save you money because there is no need for the outside premium finance company.
Make sure you review all of your payment options because paying your premium in full saves you money.