When if comes to your legal and financial status there are a few bills you never want to miss a payment on. Missing or late payments on mortgages or car loans can make your credit take a big hit. Missing your car insurance payment can lead to a lapse in coverage which puts you as great risk. Legally you cannot drive your car with inactive insurance and could face monetary penalty or loss of your license if you are caught driving without an active minimum liability policy in place.
Many insurance companies will offer monthly discounts if you set up auto drafts or auto withdrawal when you sign up for your plan. An auto draft is an agreement you set up between your bank and your service provider that allows them to deduct the funds for your bill automatically from you bank account on a set day each month. Because the payment will be a set amount on a predictable date it is easy for you to budget your monthly expenses in a way that makes sure your most important payments always get paid first.
If an emergency arises and you need to make a payment late or in cash you can arrange this with your bank and service provider. Mostly you want to stick to the auto draft policy though in order to keep your discount and your policy active at all times. Using this common easy payment method can help you keep payments current and can help families budget properly for recurring monthly expenses.
There are a few things to consider when setting up auto payments. Manual payments allow you more flexibility to take advantage of grace periods if you have an unpredictable income schedule. You will lose this flexibility but it return it can make you more disciplined in planning for expenses in advance and having a saving cushion to fall back on. Take advantage of discounts offered in exchange for auto payment plans in order to get the cheapest car insurance premiums available to you.