Paying Your Home Insurance Premium Monthly vs. Annually
The cost of paying your homeowners insurance premium doesn’t cover only your policy; it also covers the insurance company’s expenses associated with processing payments. In order to reduce these costs, some insurers allow you to make biannual, quarterly or annual payments, as opposed to monthly payments. Though it may only cost a few extra dollars to make monthly payments, those few dollars add up when you multiply them by twelve months per year, for years to come. That means, fewer payments can lead to savings in the long run.
While some families can comfortably afford the one-and-done annual or biannual homeowners insurance payment, others must budget for monthly payments. However, even if you can’t partake in the savings, the valuable coverage is still worth it to protect you from the potential for a covered incident.
Whether you pay once or twelve times per year, it’s in your best interest to familiarize yourself with the methods of payment that are accepted by your insurer. Some people enjoy the ease of automatic payments, but you should think twice about enrolling if your checking account balance dwindles dangerously close to zero at any given time. The last thing you want is to have to pay an “insufficient funds” charge if an automatic payment overdraws your account. Many people prefer manual electronic payments; just remember to set a calendar reminder so you don’t lose track of the due date.
Your agent can help you determine if your policy allows for less frequent payments and if that’s a good option for your family.