Car insurance companies usually offer six-month or 12-month policy terms, but how often you pay for car insurance is typically up to you. Most car insurance companies offer a variety of payment plans, including options for 12-month, six-month, three-month, and monthly payments.
Most companies offer a discount for making fewer payments, so choosing to make one big annual payment in-full could save you money on your car insurance. But each company is different, so some companies may offer different payment plans than others.
Is car insurance paid monthly or annually?
Car insurance can be paid a number of ways, but most companies provide a small discount for making fewer payments. Paying every three months will usually save you money over monthly payments, while paying one payment for a six- or 12-month policy will save you money over paying every three months.
There are usually three ways to make your car insurance payments:
Pay in full at the start of the policy: If you can afford to pay your car insurance premium in full, you can pay your bill with a single payment at the start of the policy. Drivers who pay their policy in full will make one payment per year for annual policies or two payments for six-month policies.
Pay quarterly (every three months): Quarterly car insurance payments mean you’ll make payments every three months. Drivers with annual policies who choose to pay quarterly will make four total payments, while drivers who have six-month policies will make two payments.
Pay monthly: Most car insurance companies let you pay for your policy monthly. Monthly payments allow drivers to make smaller payments, but it can cost more over the long run.
→ Learn what happens when you don’t pay your car insurance
Ways to pay for car insurance
Whether you’ve set it up so that you pay for car insurance monthly, every three months, or once a year when you renew your policy, you also have options when it comes to how to make your payments. Those include:
Paying automatically through and electronic funds transfer (EFT)
Paying with your debit or credit card
Mailing a check
You’ll typically earn a discount on your car insurance if you set up automatic payments through an EFT or a recurring charge on your credit card.
→ Lean more about how to make your car insurance payments
How is a car insurance premium determined?
A car insurance premium is the amount you pay for your car insurance policy. Your premiums can be broken down into 12-month, six-month, three-month, or monthly payments.
Your car insurance premium is is determined by a number of factors, including your:
The make and model of your car
→ Learn more about how much car insurance costs
How is a car insurance premium different from a deductible?
Basically a premium is the regular payment you make to keep your policy active, while a deductible is an amount you have to pay out of pocket for certain types of claims.
But car insurance terms can be confusing. There are lots of words that refer to amounts you are expected to pay for your car insurance, including both premiums and deductibles. Let’s break down the difference between the two:
Car insurance premium: Your insurance premium is the dollar amount you pay for your car insurance. Your premium is based on your rates, with any taxes or fees added. You have to pay your premium to have a car insurance policy, whether or not you ever file a claim.
Car insurance deductible: Your deductible is the amount you are responsible for paying out-of-pocket when you file a claim. For example, if you have a $1,000 deductible and file a claim for $10,000, your insurance company will write you a check for $9,000 and you are responsible for paying the other $1,000 in repairs. Your deductible only applies if you file a claim; if you don’t ever file a claim, you won’t ever pay a deductible.
Remember that you only pay a deductible for certain kinds of claims, usually when you’re dealing with damage to your own vehicle. Deductible amounts are usually set at $500 or $1,000.
→ Learn more about how to choose a deductible amount
Frequently asked questions
Is insurance paid monthly?
It can be, depending on your insurance company. Most insurance companies allow you to make monthly payments, but companies have different payment options. In Connecticut, for example, Allstate allows you to make as many as four payments for a six month policy, but doesn’t offer a monthly payment option.
Is it better to pay car insurance monthly or every 6 months?
It depends. If you have the money to make a big payment every six months, you will pay a little less for your car insurance over time. If you need to make payments monthly it will cost a little more, but you won’t need to come up with one lump sum.
Is car insurance paid twice a month?
No, the payment options with most car insurance companies are annual, every six months, every three months, or monthly payments. Paying for car insurance twice a month is usually not an option.
Are insurance payments yearly?
If you choose a 12 month insurance policy, you can usually make one annual payment per year. Most insurance companies offer a discount for drivers who pay their car insurance with one annual payment, typically called a paid-in-full discount.
