You may not realize that your monthly insurance payment includes billing fees. The average billing fee for a direct bill policy will vary from $5-$10 per month. While some companies charge less, some charge as much as $18 per month. In California insurance companies are required to send clients several notices in addition to their monthly bills and insurance information. With so much paperwork being mailed and processed, it is understandable for insurance companies to charge the client a fee for this service.
These extra fees and paperwork are avoidable. An easy way for you to save money on your policy each month is to elect for the insurance company to automatically draft the installments from your checking account. The average savings from doing so is between $4-8 per month. Almost every insurance company offers a reduced billing fee for electronic funds transfer. Most companies will send you a schedule of installments that will outline all of the installments that will be drafted from your account for your policy period. If there are any changes in the amount that will be taken from your account the insurance company will notify you in writing prior to any payments that differ from the original amount. Minimize your monthly payment by reducing your fees.
Although having your auto insurance payments taken directly from your account can save you on the billing fees on your policy, paying you auto insurance premium in full can completely eliminate the billing fees all together. Depending on the type of policy and the state that you live in you may actually qualify for a discount for paying your policy in full as well as the elimination of the billing fees. The combination of the paying in full and qualifying for the paid in full discount can save you hundreds of dollars per year.
