- New business customers usually will require a deposit payment
- An insured should shop around in the market for the best payment terms
- The risk you present to the insurer could dictate whether or not you have to pay a deposit
These include things such as what common types of coverage include:
- what a typical premium is
- how that premium is calculated
- what usual payment terms are that go along with the policy
These are all fair questions, but they also all have answers that you want to be generally aware of in order to be an educated consumer in the marketplace. This includes knowing whether or not you have to pay a deposit to get a car insurance policy.
The insurance industry is one of the most competitive markets in the world. This is a great thing for consumers because it means that you have the ability to really shop around, do price comparisons, and find the very best deal.
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Payment Terms Vary
Payment terms truly are going to vary depending on the insurance carrier that you choose to go with.
Traditionally, as a new business customer for an insurer, you are probably going to be asked for a deposit right out of the gate before you have coverage that goes into effect.
While this is not always going to be a requirement, it is generally the rule of thumb that most insurers will go by.
The reason as to why insurers want to get that initial deposit from a new customer is so they know that the customer actually intends to pay the premium on their policy.
It is a deposit payment in good faith essentially for the insured to say to the insurer that they are buying the policy and they intend to pay the full premium and see it through.
This does not mean that a deposit is always going to be required, though. Some insurers, in an effort to try and get your business with them, will not actually require a deposit right out of the gate.
They may allow you to get a car insurance policy, have it be in effect for a month or so, all before they every collect that first installment payment for the premium.
Renewals Are Different
A renewal policy is an entirely different animal in the insurance world. When you come up for renewal with an insurer, you rarely are asked for a new deposit payment in order to secure the renewal.
The fact that the insurer wants to renew your policy, to begin with, means that they appreciate your business, you are a risk that is within their business appetite, and they know you are going to be paying the premium in full more than likely.
For these reasons, a renewal usually is not going to have you paying that deposit out front. The risk that you present to the insurer can also have an impact on whether or not a deposit is required on your part to get the policy into effect.
If you are a consumer who has a bad history with insurers and historically does not pay premiums in a timely fashion, then you may be asked to pay a deposit or even the full premium right up-front.
If you have a bad credit score or poor driving history, that could also be a signal that you are a higher risk and therefore a deposit is something that should be sought out.
The flip side of this is the consumer that has a perfect credit score and driving record.
Since you are going to be that much more desirable as a piece of business to insurers in the market, they may be more willing to waive a deposit requirement to get you under their book of business.
Understanding that you as a consumer hold a lot of power in the market is very important. You truly do have the ability to shop around, do price comparisons, and find not only a policy that suits your needs but payment terms that fit you as well.
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from Auto Insurance | Compare Cheap Online Auto Insurance Quotes http://bit.ly/2cIhiNS
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