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Things to remember...
  • Auto-renewal is offered by many auto insurance companies
  • It is a way to get coverage immediately and to stay covered without having to remember to pay
  • Make sure you know the renewal dates to avoid misunderstandings or a lapse in policies

When shopping for auto insurance, some people wonder about auto-renewal. In fact, this issue is not unique to the insurance industry.

Auto-renewals are a problem for many different types of businesses.

Consumers sometimes forget that they took out an auto-renewal; then they complain that the company deducted the funds illegally.

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Auto-Renewal Issues
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Some of the problems with auto-renewals include:

  • Forgetting about your agreement – One problem that can occur with an auto-renewal is that you may forget you signed up for it. If you do not keep careful records of when expenses will be deducted, you may find yourself lacking in funds due to the unexpected withdrawal, which causes some customers to be upset with the insurance company and to cancel their policies.
  • Failing to have sufficient funds to cover the withdrawal – Another problem that occurs with automatic renewal is that the amount may be substantial if you renew annually, creating a significant headache for consumers who had forgotten when it was supposed to renew. Again, keeping careful records of when expenses come out is important.
  • Duplicate coverage – When someone drops a previous coverage and then starts a new policy but fails to inform the former insurance company, they may not know you want to cancel in time to keep the auto-renewal from taking place. Thus, in some cases, duplicate coverage can result.
  • Failure to have claims paid due to lapse – If you are caught between a lapsed period due to having insufficient funds, you will not be covered during this period. If you have an accident during the time you were uncovered, the insurance will not pay your claim.

According to confused.com, complaints are often recorded with insurance providers that deal with disgruntled customers who are unhappy with the way an insurer handled an auto-renewal.

But keep in mind that, once you agree to an auto-renewal — whether in real life or online — you have a financial and legal responsibility to fulfill on your end.

Advantages and Discounts for Auto-Renewal
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Remember that insurance companies often provide a discount to consumers who agree to allow their payments to renew automatically. You can sometimes save hundreds of dollars by agreeing to this with certain companies online.

But you have to remember when the deduction is set to occur and remind yourself so that the funds will be available.

Regardless of the number of consumer complaints that are fielded weekly among insurance providers concerning auto-renewal, there is nothing illegal about it.

Like any agreement, you must abide by the contract that you signed.

It’s a Contract

With digital online services so prevalent today, it is sometimes easy to forget that you are signing a legally binding contract when you agree to purchase insurance or to sign an auto-renewal agreement.

Even though it is not done in a traditional manner with pen and paper, your digital signature carries just as much legal and financial jurisdiction as if you signed it with pen and paper.

So there is nothing illegal about this process.

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When It Would Be Illegal

There are only one or two situations in which an auto-renewal would be considered illegal — that is if you did not agree to have the funds deducted at a particular time each month/annually and the company did it anyway.

This instance is often referred to as “slamming,” wherein a salesperson sells you a policy without your permission, assumes a sale you did not agree to, or otherwise thwarts the legal process that you are entitled to through the FTC (Federal Trade Commission).

Another case that might be considered illegal on the part of an insurance company is when they failed to honor your policy or your claim when you paid the premium through auto-renewal.

As long as the funds were available at the time of renewal, a company cannot later argue that you did not have the funds when they deducted your premium.

Otherwise, they would deny coverage falsely, which is considered fraud.

Insurance Regulations
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The insurance industry has very strict regulations regarding the conduct of insurance agents, and they are not allowed to misuse or abuse their position.

If you suspect that you have been a victim of this, you can go to your state insurance website and report the incident. See also the state map link we gave you at the beginning of this article.

Also, you may need legal assistance if you were denied a claim due to an auto-renewal that a company failed to honor.

Remember that most mistakes happen honestly. Most insurance companies realize the importance of honoring claims and policies. They understand the importance of your coverage being intact and will try to work with you should your premium not be paid.

Most consumers also know that they must have the funds available at the time of the deduction and are responsible for making sure the premiums are paid on time.

The best rule of thumb is to communicate both at the beginning of a policy and throughout. Clear communication and understanding of the policy, as well as the payment rules, will avoid unneeded misunderstandings, cancellations, and legal issues.

Remember also that an insurance company cannot just cancel your policy automatically. They must give you a 30-day warning from the time that your payment failed to post to your account until they cancel.

This state law is virtually in every state that requires insurance. Again, check with your state insurance site such as this one for Arizona residents to find out where you stand with the state insurance regulations.

Shop and Compare
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The best line of defense against misunderstandings regarding auto-renewal is to shop around and compare before you buy a policy.

Feel free to ask questions of your insurance companies that you are considering and ask them about auto-renewal.

Find out how often it will renew, how much money you may save using this feature, and the exact date of renewal.

Knowing this information at the front end will save you a lot of headaches later on. Most companies do not require auto-renewal to join, but it makes your coverage start more quickly and may also save you money on your policy.

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Things to remember...
  • Car insurance carriers can offer policies at any length they choose
  • Many niche insurance carriers specialize in short-term car insurance policies
  • Doing price comparisons can help you get the best one-day car insurance policy premium and coverage combination
Car insurance is a unique product offered by an insurance carrier. Customers drive what is offered by car insurance carriers due to the immense competition that exists in the marketplace.

You as a consumer can dictate what you want regarding the coverage provided by the following:

  • The policy
  • The policy length
  • And more

Taking this into account, can you buy car insurance for just a day if you need it?

The answer is not as clear-cut as you may think; it will depend on the carrier.

The great thing about the length at which car insurance offers is that every carrier is going to be different. Some insurance carriers are going to tell you that you can only buy a car insurance policy for a six-month or a 12-month period, while others may leave the option up to you.

Car insurance is a product that is truly on-demand; a car insurance policy can be purchased online without ever having even to talk to an insurance representative.

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The Availability of One-Day Car Insurance

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The availability of something such as car insurance for a single day is far more widespread than you may think. It is up to you as a consumer, though, to make this discovery on your own.

All it takes is a bit of research using the Internet or even just reaching out to some insurance carriers over the phone.

Consumers cannot get what they are not comfortable enough to just ask for. Most car insurance carriers are going to offer you the standard annual insurance policy that lasts for a 12-month period.

Others may make it more standard for the policy term to be six-months. Those are the two norms, but they are not going to meet the needs of everyone.

One-day car insurance is available from the vast majority of the big car insurance carriers out there. What you want to do is to inquire about who offers is, and see what premiums that they are charging as a result.

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The Niche Carriers May Price Better

There are going to be niche insurance carriers out there that are going to be able to price policies such as a one-day car insurance policy in an improved way compared to the big carriers. This is because these carriers specialize in what are known as short-term car insurance policy.

The car insurance carriers specializing in short-term policies have underwriters, rating information, and actuarial support that allows them to accurately price policies, access risk, and present premiums that are going to be highly competitive.

Not only can you buy car insurance policy for just one day, but you also have the ability to buy the policy on-demand.

You may find out that you need to borrow a car for which you need to have insured for a day, but only right before the need arises.

Reaching out to a car insurance carrier can allow the policy to be available right when you need it and have it go into effect, to the minute, that you need it to be.

Know Your Insurance Carrier

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The last thing that you want to do is to sign on with the first carrier that offers you a one-day policy. Make sure that you are aware of if your car insurance carrier is known to be ethical and are known to take care of their customers.

Do not just make price comparisons on the premium alone; research how their customer service stacks up as well against the competition.

Car insurance providers are giving consumers more power than ever before. The important thing to remember is to shop around, make price comparisons of what all of the different carriers are making available.

See who is offering a one-day car insurance policy, and at what premium, they are offering it at.

Make sure that the coverage, the deductible, and everything in between meets your needs before you have the policy bound. Shopping around can help you end up with the ideal one-day car insurance policy.

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Here's what you need to know...
  • Some companies charge separate transaction fees for monthly payment options.
  • You may be able to pay the full premium ahead of time to take advantage of special discounts.
  • It’s prudent to shop around for better rates at the end of a policy term to maintain the lowest premium levels possible.
When it comes to insurance payments, there are several options available to you.

In the past, insurance had to be pre-paid for a six-month or one-year term, but companies started offering monthly plans that are easier on tight budgets.

However, taking advantage of the monthly options can lead to higher fees. Here’s what you should know about the different payment options so that you can make an informed decision.

Use our free car insurance comparison tool to start saving today!

Determining the Policy Period

AdobeStock_51142450-1600x1600When you’re shopping for insurance, you’ll have to consider the different policy period options. Known as the policy period, this starts on a date of your choosing and can be at any time of the year.

You will have the following choices:

  • Month-to-month terms that are usually reserved for high-risk drivers
  • Six-month premiums that are preferred by most carriers
  • One-year coverage options are available to consumers

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The Hidden Costs Associated with Paying Over Time

Many people choose to pay their insurance monthly or quarterly rather than paying the full amount at one time.

While most companies are happy to provide you with payment options, you should remember that these do come with some hidden costs.

Before you decide to make smaller payments throughout the year, ask your company if there are any fees associated with this option.

The insurance company may charge a little more to cover administrative costs and the assumed risk that a client may stop paying on the policy midterm.

Some companies don’t offer installment plans, but they will provide you with assistance for financing, known as a “premium financing agreement.”

If you decide to sign up for this type of plan, be sure that you understand:

  • The schedule of payments
  • Finance charges and annual percentage rate
  • The potential consequences of a missed payment

These fees can vary widely from one company to the next. When shopping around, be sure to ask if there are any installment fees associated with paying your bill a little at a time.

You May Save by Pre-Paying

Dollarphotoclub_103413467 (1)-1600x1600Insurance companies often offer exclusive discounts for safe drivers, certain types of vehicles, and even specific professions.

What many people don’t realize is that it’s also possible to save by paying for the policy ahead of time.

If you can afford to pay your entire premium at the beginning of the year, then this can be a smart way to save money.

You don’t even have to worry about losing money if you decide to switch carriers halfway through the year. Most companies will pro-rate the bill and send you a refund check for the remainder of the term.

Loyalty Doesn’t Always Pay

Insurance premiums can vary widely from one company to the next, and you may not be rewarded for sticking with the same company year after year.

Research shows that insurers use special software and algorithms to show how sensitive customers are to price increases.

If they think they can bump rates up slightly without losing customers, they will.

This possible price increase is one reason why you should shop around once a year. Whether you’re on a six-month or one-year policy period, it’s smart to take a look at the competition and see what they have to offer.

You just may find that another company is willing to provide you with more drastic discounts to gain your business.

No Lapses in Coverage

Another great benefit of prepaying your auto insurance is that you won’t have to worry about a lapse in coverage. If you forget to pay your bill one month, then the premiums may rise.

However, you won’t have to worry about this if you cover the entire expense six months or even one year at a time.

Another added benefit of the annual renewal is that you’ll have that opportunity to shop around before you sign up for another term.

When you’re prepared to cover the full cost in advance, you may be able to negotiate a lower rate with the next company.

Before you sign up for any particular term, learn more about the payment options and hidden fees. If you have this information when you start shopping around, then you can make a more useful comparison.

The goal is to save money in the long run, so it’s important to consider all of the potential hidden costs, including service fees for spreading the cost out over more payments.

Enter your zip code in our FREE comparison tool to start your journey on saving money!

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