For most of us, the most important factor in choosing an auto insurance company is the dollar sign. The cheaper the auto insurance coverage, the better – nothing is more straightforward than that. Chasing after the cheapest coverage magically simplifies the selection process; to know which insurance to go for, just chose the policy with the lowest premiums!
Unfortunately, things aren’t always that simple. Sure, paying low premiums is something you should strive for, but are you sure you want to increase your deductibles just to reduce premiums? Do you have the ability to pay for your deductibles if you get into an accident? Do you really want to lower or drop that coverage just to reduce premiums?
Many questions need to be answered before you can make an informed decision regarding which auto insurance plan to go with. However, we won’t look at all of them here. For now, let’s just look at monthly car insurance plans and how they can save you money if bought during the right circumstances.
What Are Monthly Car Insurance Policies?
Monthly car insurances simply refer to the payment of auto insurance premiums by the month. Most policies cover a period of three, six, or twelve months, and most of these policies require the client to pay for the coverage at the end of the period of coverage.
What most people don’t know, however, is that some insurers also offer an option for clients to pay monthly. By doing this, you are simply given the option to pay at the end of each month instead of putting up one entire chunk of payment at the end of the period of coverage.
Advantages of Monthly Car Insurance
Flexibility – Monthly car insurance plans allow clients to pay more flexibly. If the clients want to change insurers, they do not have to wait until their coverage period is up – they can switch insurers immediately (or at least at the end of the month)!
Less Financial Commitment– Monthly car insurance policies allow clients to spread out their financial burdens over a more extended period of time. Often, many clients find it a little straining to cut up a large part of their finances at the end of every year just to pay for their auto insurance. Paying month-on-month allows these lump sums to be cut up into bite-sized chunks, making it more manageable for clients to pay.
“Preview” Insurance Policies – Because you’re allowed to move to another insurer within the month, you can use month-on-month auto insurance payment plans to “test-drive” a policy. You can always switch to an annual payment scheme at a later date.
Disadvantages of Monthly Car Insurance
Higher Premiums – Monthly car insurance plans usually amount to a higher premium paid over the lifetime of the policy. The reason for this is because insurers understand that clients can terminate their contract at any time. Therefore, it is a little less profitable for insurers to insure clients that are on month-to-month car insurance policies.
Lack of Benefits – Often, monthly car insurance policies don’t come with good benefits and perks, such as roadside assistance and free rental reimbursement coverage. This lack of benefits and add-ons is one of the main reason most people opt for longer car insurance policies.
Missed Payments – There are times when clients accidentally forget to pay for their monthly car insurance plans. This might cause the insurance policy to lapse or terminate prematurely – and that means you’ll suddenly be driving without coverage just because you paid the premiums one day too late.
All in all, different people have different views on whether to get monthly car insurance. To understand whether you truly need this kind of insurance, you must understand your wants and needs before making a decision.
After you’ve decided that a month-to-month insurance policy is right for you, start looking for quotes! At Insurance Panda, our quote generator will help you find out the best deals in town. Just key in your zip code, and we’ll do the rest of the hard work for you!