Is auto insurance a utility bill?

Though most auto insurance is billed monthly, auto insurance is not considered a utility bill. Average rates for auto insurance in the U.S. are around $118/mo. nation-wide.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 27, 2021

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Things to remember...

  • There are many terms and documents associated with managing your car insurance policy
  • Insurance is an indemnity contract between an insurer and a car owner that protects the owner from financial loss
  • A utility bill is an invoice that’s sent to you for trash, water, sewer, electricity, and gas services for a home
  • Utilities are usually considered to be services that keep a property at a certain address up and running
  • Auto insurance isn’t a utility bill because it’s not a service supplied by a local government
  • You must buy insurance on your cars to satisfy state law and for financial protection while you’re driving

Auto insurance is one of those expenses in life that you just can’t avoid. You might be able to skip the bill when you choose not to drive or own a car, but if you want the freedom that a car will offer you, you’ll have to buy at least some coverage.

If you’re setting your monthly budget, comparing auto insurance premiums to set your insurance expense budget is a must. Enter your zip code above to compare for free right now.

As you’re jotting down all of those pesky expenses that you pay each and every month, you have to know how to categorize them.

You’re always going to have your housing, car, and food expenses, but it can be confusing when you’re trying to decide where to plug in your insurance payment. If you’re wondering if your auto insurance is a utility bill, this is what you should know:

Can you classify auto insurance as a utility bill?

Utilities are specific services that are supplied by the local government at a cost. The services that are provided to help you keep your house up and running so that you can live comfortably.

Some of the services that meet the definition of utilities include:

  • electricity
  • gas
  • natural gas
  • trash
  • water
  • sewer

Auto insurance is a financial contract but it’s more than just that. When you’re paying for your policy, you’re paying for the protection and the service.

You’ll have to pay the installment or premium to maintain your insurance coverage, but that doesn’t mean that the contract meets the definition of a utility.

If anything, auto insurance is considered an auto-related expense that’s part of the true cost to own a car.

Many people associate regular monthly expenses like utility bills. In most cases, your utility bills are paid monthly or quarterly because they are based on usage.

While auto insurance is one of those bills that you’ll have to manage that can be paid monthly, there’s a lot more flexibility when you’re setting up your auto insurance installments.

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What type of auto insurance installments can you choose from?

Most auto insurance consumers will pay their premium installments once a month. The payments will be due on the same day each month until the policy is up to renew.

Some carriers will send a physical bill every month and others will deduct the payment and the installment fee from your account automatically. Here are other installment options:

  • Five-pay plan – two months down and then five monthly payments with one month off prior to the renewal
  • Quarterly plan – payments are due once every three months (two payments for six-month plans and four payments for annual plans)
  • Semi-annual plan – payments due every six months (only available on annual plans)
  • Pay in full plan – payment for the total policy premium at the beginning of the term (no fees are charged for paying in full)

Can you give a lender your insurance bill for verification?

You might wonder why anyone would even ask if auto insurance is a utility bill. One of the common reasons this question will come up is when an individual is asked to provide documents that verify their permanent physical address.

Since the document is designed to verify where you live, asking for utility bills is common.

When you have a utility bill for something like electric or gas in your name, it shows that you’ve activated utilities in your name and that the residence is yours.

Most people won’t just activate electricity at an address to secure a loan when they don’t live in the community.

While you might think that a phone bill, internet bill, or an insurance bill would be a sufficient replacement for a utility bill, most lenders aren’t going to accept anything but a utility bill that’s issued by a local utility company.

As much as you’d like to think that your address on your insurance bill is enough, you could easily change this address by making changes through your agent which makes your insurance policy a bad verification document.


Why is auto insurance required by state?

The state can’t tell you that you have to have electricity or gas if you’re living on your own.

If you are housing a child or someone with medical problems, you could be ordered to provide these basic things or you could be charged with neglect. That’s the only time that the law could step in and have a say.

With auto insurance, the state always has a say in whether or not you have to buy auto insurance. By law, anyone that owns a car in a state with at-fault auto insurance laws or a no-fault system will be ordered under the law to maintain insurance.

Some states have lenient laws that let you purchase bonds on put down deposits as an alternative, but the easiest way to comply would be to pay liability insurance premiums.

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What happens when you don’t buy auto insurance?

If you don’t buy auto insurance, you’re choosing not to comply with a statute. As with any type of statute that’s written into the state’s municipal code, you can be penalized as a punishment for failing to comply.

It doesn’t matter if you blatantly ignored the law or you had an oversight with your bill pay system when you have a lapse of insurance you have to deal with the consequences. Some of those are:

  • Suspension of your license
  • Suspension of your vehicle registration
  • Vehicle registration reinstatement fees
  • A citation for driving without insurance
  • Vehicle impoundment for driving your uninsured vehicle on public roads
  • High-risk insurance premiums
  • The requirement to appear in court or to complete community service
  • A high fine for failing to comply if convicted
  • Jail time (up to six months) for habitual offenders

Do you need proof of insurance to buy insurance?

Consumers who are shopping for low rates on their auto insurance should always have the documentation that they need to enter in the information that’s needed for a quote.

If you don’t have everything you need for the verification documents that the agent needs to supply with the application, you could face some unexpected rate increases.

Typically, the insurance company will at least ask you who you were insured through prior to buying insurance with the company.

You might think this is an invasion of your privacy, much like an employer asking about previous employers, but the information is used to give you discounts. If you’ve had continuous insurance and you provide proof, you can get a lapse-free discount.

Will you need a utility bill to buy insurance?

You might need your insurance declarations page to purchase insurance, but you’re not going to be asked for a utility bill to prove your residency with most carriers. It’s common to give a rental car carrier this document, or even a lender, but not an insurer.

If you’re asked for a utility bill, it might be because the garaging address verification doesn’t indicate that your zip code is accurate.

Don’t make the mistake of bringing your insurance documents with you when you’re asked for utility bills. Look in your files for a trash bill, a water bill, an electricity bill, or something along those lines.

If you’re trying to find insurance, you shouldn’t have to provide a utility bill. Just use our online rate quote tool and get instant quotes.



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