The need for monthly auto insurance


Most people can’t afford to make one huge lump sum payment towards their auto insurance premium and find it really difficult to save up and even take small loans from friends and colleagues to make payments in one go. Auto insurance companies saw this as an opportunity to provide their customers with a monthly payment plan, at a price needless to say. The customer doesn’t make a one time payment and instead makes one down payment and either, 3, 6 or 12 monthly payments as the case may be. The insurance company charges the customers a rate of interest as the case may be, not all companies charge an interest. 

How it works 

The customer can either opt for a yearly cover wherein he or she would need to make payments for the next twelve months, or else a customer can also take it on a “pay as you go” system and pay the premium monthly till they need the cover. When the customer no longer needs the cover they need to call and inform the insurance company that they will not be making that months payment as they do not wish to be insured anymore. Failure to inform the insurance company will lead to them billing you. It is always better to have a written communication as evidence; a fax or an email is preferred to a telephone call and you should always ask them to confirm receipt of your communication.


Cover and extent of cover work on the same principles as standard auto insurance works. 

You can pick between liability, collision, and comprehensive insurance to ensure protection from untoward incidents.

Types of cover 

Liability cover will insure you against any damage you cause to a persons health or vehicle in the event of an accident; their medical bills and vehicular repairs are covered by your insurance provider provided you have adequate cover. Collision cover will insure you against any damage to yourself and your own car in the event of an accident; your medical bills and vehicular repairs are covered depending on your cover and your deductible amount. Non collision cover will insure you against any damage to your car caused by backing up into a stationary object, acts of nature and vandalism. Comprehensive cover will insure you from almost anything that can happen to your car or your person while using it. Uninsured cover will insure you from damages that occur when you are involved in an accident with an uninsured or underinsured driver. 

Extent of cover 

Every state has a pre defined limit of cover that the DMV (Department of Motor Vehicles) considers the bare minimum extent of cover necessary. This is by no means a yardstick and will have you spending huge sums of money in the event of a car crash. Always buy more than the state minimum, up to what you can afford, and under the current value of your car. Being over insured makes as little financial sense as being underinsured. 

Since you will be paying monthly installments you can always get adequate insurance without burning a hole in your pocket since the added expense is spread over the course of a year. 

No down payment 

No down payment auto insurance is quickly gaining popularity; the customer needs to make no initial payment except for the first monthly installment. Upon payment of your first monthly installment your policy comes into effect.