Having your insurance premium set up on monthly auto draft is a fantastic way to pay your premiums. This is the most common and there are several benefits to choosing monthly EFT. If that is working well for you, this post is one you can skip. However, I am often asked if paying in full has any benefit so I wanted to respond to that question here.
Is there a discount for paying in full?
Yes. With every carrier, if you pay your auto insurance in full for the year, you will receive a discount. In general, the premium is reduced just for paying the total due. There are also small fees associated with EFT collection that are tacked on to each monthly draft that you are able to avoid. In some cases, the savings totals to a couple hundred dollars per year to pay in full.
How do I pay in full?
As your next renewal rolls around, give me a call to set your billing to annual pay. You will then remit the entire discounted premium for the year.
My suggestion is to use your tax return or stimulus money to make this initial payment. Then, each month take out the amount you were paying monthly and set it aside. The following year when the premium is due again, you have the paid in full amount ready to go. If you decide you want to go back on monthly, it’s as simple as a phone call to do so. You are not forced into full pay the following year.
What if my premium changes?
When you pay in full, you are paying for the policy assuming all vehicles and drivers will stay the same. If you add, remove, or change anything on your policy, the premium will adjust. When the premium reduces, a refund is sent pro-rating from the day of the change through the end of the period. When the premium increases, an invoice is created and due within the next thirty days for the full amount of the change.
If you have additional questions, let us know. Give us a call at 615-472-1515 and we can discuss your policy more specifically.