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Car insurance provides crucial protections for motorists in the event of an accident or if their cars are stolen. Car insurance isn’t just a good idea — it’s mandated by law in 48 states and Washington, D.C. To pay for that protection, you are charged a car insurance premium.
The premium you pay for car insurance will vary depending on several factors. Here’s what you need to know about how car insurance premiums are calculated to help you find the best deal. We’ll also explore ways you can save on your premium to keep more money in your pocket.
What is a car insurance premium?
A car insurance premium is the amount you pay an insurance provider for a policy. Premiums are typically paid monthly, semi-annually, or annually. Although monthly payments offer the convenience of paying as you go, premiums that are paid semi-annually or annually usually cost less overall. Insurance providers often give discounts to policyholders who pay months in advance because it decreases the risk of late payments and cancellations.
