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Payments for auto
insurance are constructed from two
components, premium and excess
(deductible). The premium is the annual
subscription, which can be paid monthly,
to pay for the insurance. The excess is
a lump sum that you pay when you have an
accident to fulfil your auto insurance
contract. You can vary your excess
payment to vary your premiums. As an
example, if your premium is $100 per
month with a $200 excess, if you have an
accident you have to pay your $200
excess to make a claim. If you want to
reduce your premiums you can raise you
excess to $500 and you may pay only $60
per month. If you are a confident driver
this may be the best way to pay your
auto insurance as you don’t want to
waste money on premiums
To pick the right auto
insurance, you should look for a company
that has good discounts on premiums for
raising your excess. Also, you should
look for a company that has no a good
‘no claims bonus’ policy. Some auto
insurance providers offer ‘no claims
bonus’ for life if you have a clean
record for 7 years or so, sometimes
less. You should also pick an auto
insurance provider that lets you
transfer your claim history. You don’t
want to have a clean record for 6 years
then switch providers and have to start
again.
The last thing to look
out for is interest on monthly payments.
Some auto insurance providers offer a
discount on paying your premiums
annually however just look for the best
deal. You don’t want to pay extra just
for splitting the payments up monthly.
Bite the bullet, pay annually and get
your discount. If there is no discount
then pick the payment schedule that
suits you best. |
