Auto Insurance Secrets and Discounts: Billing Fees

Auto Insurance Secrets and Discounts: Billing Fees

In this series of our Auto Insurance Secrets and Discounts we focus our attention to Billing Fees. When it comes to Car Insurance, drivers are always looking to save on their premium, but an often over looked place to save is billing fees. California auto insurance companies submit their rates to California Department of Insurance for approval, they are also allowed to charge a fee for sending you bills, or “billing fees.” So even if the annual premium with one carrier may be the lower having the billing fee added to the monthly payments may cost more than another carrier.

So how much are Car Insurance companies billing fees?

Each carrier is different. Paying the term for your auto insurance policy in full will give you the default discount by avoiding billing fees, with your auto insurance company. Since the insurance company charges you every time they mail you a bill, the less frequently they send you a bill the less you will pay on billing fees. Your car insurance company may offer payments in every 2 months or 3 months rather than having a bill every month.

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EFT or Auto Pay is a great way to save on billing fees. If you can’t pay the full term for your California auto insurance, you may be able to set-up automatic payments which can save you a significant amount. Some carriers have $0 EFT billing fees or $1 for EFT billing fees depending on the carrier, so stretching your insurance premium for the term with payments is a economically smart choice. As you can keep your money to pay for other bills especially credit cards carrying interest charges.

How high are some of the billing fees? The are carriers that charge up to $18 a month for sending you a bill. So even though your annual car insurance premium is $295 a year. The simple math of taking the annual premium and dividing it by 12 is NOT going to be your monthly payment (sorry $24.58 a month will not be your payment.) The Insurance company will calculate more like this: $295/12 = $24.58 + $18(billing fee)= $42.58 a month. If we consider the billing fee as interest charged vs the premium $18/$24.58 = 73% interest. Ouch! So consider paying the premium in Full or setting up EFT/Auto Pay to keep your auto insurance cost low.

Car Insurance companies love billing fees, here is a way for the companies to make EXTRA $$$ for giving a you a LOAN and acting like an unofficial bank or credit card company ($18 a month billing fee.)

Your insurance agent is your ally in fighting these fees, as the agents hate the billing fees as much as California drivers. Talk with your agent and consider all the options available to keep your TOTAL cost low on your insurance policy.

Calico Auto Insurance is an independent auto insurance agency working with top carriers in California, some of which have very low to no billing fees. We quote you the lowest rate at the best coverage always and our keen eye to detail will help you save on unnecessary fees and charges. Contact us at our Los Angeles and Pico Rivera office 323-469-6500 or 562-205-2495 today and we will give a FREE Overview of your Insurance policy, to make sure you are getting the Lowest Rate for the Best Coverage.