Earlier this year, I wrote about periodically doing an insurance rate comparison to save money. However, if you shop around for the best rate, and then pay a premium surcharge in order to make a monthly payment, you are losing out on some of your rate savings.
There are several things that you can do to avoid the premium surcharge (which can be as high as $4+ each month).
- Pay the entire balance due up front
- Ask your insurer if you can get the monthly surcharge waived if you have the premium automatically deducted from your checking account each month (I know that Liberty Mutual offers this).
Ever since we got married, my husband and I have always paid our auto insurance premium in full. Once you've gathered the money the first time, you simply pay yourself each month into your savings account so that you have the money when the full premium bill comes due.
How do you accumulate the money the first time, though?
- If you get a sizable tax refund, you can save this money for your next premium bill. Please Note: In my opinion, it is better to get a higher paycheck each month than give the government an interest-free loan throughout the year, but sometimes it's difficult to get it exact especially if you receive bonus income.
- Each month when you pay the insurance bill, allocate a little bit extra to your savings account to try to save up for the full premium when the annual bill is due.
- Save any "extra" money that you can find throughout the year towards your next 6-month premium bill. Some ideas include getting a money change jar, selling items on ebay or Craigslist, do online surveys, etc.
How do you avoid paying fees on your insurance premiums? How have you saved up enough money to pay the semi/annual insurance premium in full?