A car insurance premium is the amount you pay your car insurance company for your policy. Most insurers offer six-month or annual payment plans, but it’s not uncommon for providers to offer three-month or one-month payment plans. If you don’t pay your premium, you could have a lapse in car insurance.
Car Insurance Quote Vs. Car Insurance Premium
A car insurance quote is an estimate of what a policy may cost you. A car insurance premium is the amount you pay the car insurance company once you get a policy. Premiums can generally be paid in full up front or divided into payments.
Car insurance quotes can be different from the actual cost of your premium. Many factors affect the calculation of your quote, and information may change once you buy a policy. For instance, some insurers won’t ask for your VIN during the quote process, instead using your vehicle’s make, model, and model year to determine a quote.
If you decide to get a policy from that provider, the company may ask for your VIN to give you a more accurate rate. And if you decide to add more coverage than what you selected for your quote, your premium will likely be higher than the estimate.
Will My Car Insurance Premium Increase Over Time?
Insurance premiums typically change every six to 12 months, depending on the policy and provider. While your insurance premiums are income for your insurance provider, they also contribute to a regional insurance pool used to pay out claims. These funds are affected by the total number of claims in your region, as well as any state insurance regulations.
So your premium could go up if there are more claims being filed than usual or go down if your state legislature passes new regulatory insurance laws.
Your premium may also increase for the following reasons:
- You’ve recently filed a claim
- You have a recent traffic violation on your driving record
- You’ve changed vehicles or added a vehicle to your policy
- You’ve added a driver to your policy
- You’ve increased your coverage
In our recent survey of 1,000 car insurance customers, nearly 41% of those polled said their rates had increased without an obvious cause.