Help me with insurance 101?

I'm a first time auto insurance buyer. Let me pose this question in an interesting manner:

You're an insurance agent. You just quoted me at $500 every six months for bare-bones/state minimum coverage (just for example's sake).
Do you ask me for $500 upfront, then $500 six months later? Or do you issue me an insurance card and expect the first lump sum of $500 six months from now?

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Vyger3 years ago

If you have any relatives who have been in the military or some civil service like the Secret service, you can get USAA coverage if any of them have it. USAA is a lot less expensive and they go a little easier on new drivers. I believe the reasoning is that the military trains people in how to drive right so they have fewer incidents. If you are in the service and are active duty and you get stopped for drunk driving the military will prosecute you for violation of their code of conduct. It is a lot more strict than civilan laws. So because USAA caters to military people and military people have higher standards of conduct in regards to driving they can offer much better rates than other companies.

iceng Vyger3 years ago

So if I was an ME109 pilot I could go and get a better rate, Wow great !

seandogue3 years ago

Although auto insurance *can be paid as a lump sum, usually, people opt for monthly payments, much like an electric bill. Insurance companies usually charge a small fee each month to cover the difference, but until the day comes when your finances are to the point where you can and do pay your auto insurance in one lump sum (I started doing so about three years ago, after 35 years doing the monthly payments), it makes the process affordable. I could never have purchased insurance as a young adult otherwise...

As noted in other responses, it does depend on the carrier, but afaik, most allow either monthly or yearly payments, and I do vaguely recall the ability for me to handle mine with two payments as well, although I never took advantage of that (as I said I couldn't afford to do so back when)

Best option for you is to directly ask the carriers you're deciding on. Ask them what your payment options are and admit your ignorance. BY that, I don't mean asking the agent either. I mean ask the company direct. Individuals, especially salespeople, are more often than not unscrupulous when it comes to their own $elf-interest$, if you get my gist.

Good luck and welcome to driving!

Kiteman3 years ago

It depends on the insurer and/or agent, but they will will usually offer to spread fees on a monthly basis, say by Direct Debit, but they will charge you more for the privilage.

500 up front.

The Dark Lord (author)  steveastrouk3 years ago

Although that was my was more what I expected. I better start some side jobs than.

You don't have to pay it all up front. Most carriers will break that down into monthly installments. Often you have to pay a little extra each month for this option. But you'll only have to pay the first month up front.

Triclaw3 years ago

here in the united states you pay installments to 500 you can get a monthly bill

rickharris3 years ago

Upfront and if your just starting out it WILL be costly. Blame all the young tearaway drivers. My 144BHP sports car costs me about £180 in the UK BUT I am 65 and not expected to go mad in it! ;-)