When you compare auto insurance quotes, often times you will hear the words policy and premium. They are not the same thing. However, the policy affects your premium.
The premium is the amount of money that you pay for all the coverage that you have selected that makes up your policy.
Your policy is the list of your coverages, which includes the limits, liabilities and deductibles.
Depending on which car insurance company you went with, your premium may be due at a six-month interval or a one-year interval. Some of the policies are automatically renewed, so if you are comparing insurance and purchase another policy, notify your car insurance company immediately. That way, if your policy automatically renews, you can stop it before you need to pay another six months or a year.
When you pay your premium, you are paying in advance and it keeps your insurance in force. Some car insurance companies will allow you to pay monthly towards your premium, until the balance is paid.
You may have a six-month policy where you needed to pay a down payment towards the premium and could make monthly payments until the policy stops. These types of payments usually are not spread out over the policy term, but are paid within a three or four month period, depending upon the insurance company.
Your premium must be paid in order to keep your insurance in effect. Failure to pay your premium will result in your insurance to be cancelled for non-payment.
Car insurance premiums will vary from person to person as each person’s insurance rates are calculated differently. A man will pay more for his car insurance, where as a woman in her 40s or 50s will have the best rates.
Insurance rates are based on factors such as age, sex, credit history, driving history and vehicle insured, along with other factors.
By comparing premiums, you may not be getting the same coverage, so auto insurance comparison should include all of the same coverage limits, deductibles and terms.
Auto insurance comparison can be done at any time and you should compare auto insurance quotes often in order to get the best rates available to you.