Most auto insurance policies renew every six months. Typically, insurers allow you to pay monthly, quarterly or every six months. If you pay monthly, the insurer may add a surcharge and may require an automatic deduction from your checking account. Normally, you pay the least when you pay every six months. Technically, you do not pay a deposit, but your first payment is due before your policy becomes effective.

Starting Auto Insurance

When you purchase an auto insurance policy, you should make sure your coverage includes the minimum required coverage for your state. The policy includes four main components. Liability coverage pays for damages to another vehicle or person if you cause the accident. Collision protection covers damage to your vehicle caused by a wreck. Comprehensive covers damage to your vehicle caused by events other than collisions, including weather damage, falling objects or running into animals. Uninsured or underinsured motorist coverage protects you if you get in an accident with someone who does not have the legally required insurance or enough coverage to completely pay for the damages.

Paying Premiums

Your insurance premium is the amount you must pay every six months to keep your policy active. Most auto insurers offer you options for making this payment in smaller installments and provide you multiple payment options, including online payments and automatic deductions from a checking account. Typically, you pay a little more if you break up your payments over a longer period of time. For example, a $600 premium may cost you $105 if you make six monthly installments.

Missing Payments

Most auto insurance companies require you to pay at least one month in advance for your policy. If you do miss a payment, you usually get some type of grace period, but it is specific to your auto insurer. The time period normally runs around 15 to 25 days. You will receive a notice with a cancellation date. As long as you pay by that date, your policy will continue. If payment is not made, your coverage will cancel on the date.

Renewing Your Policy

Auto insurance policies automatically renew unless you notify the insurance company of your intent to cancel the policy. The premiums may adjust based on the age of your car, earned discounts or changes in coverage. If you do decide to cancel a policy, make sure you have another policy in place, as every state requires some type of minimum liability insurance to protect others if you cause an accident.