Best Auto-Pay Insurance Discounts in 2024

Automobile insurance is an important and generally required part of auto ownership and operation. Auto insurance protects you as the driver and operator of a motor vehicle, as well as others on the road and gives you peace of mind when driving. Your auto insurer will help cover your costs in the event of an accident, including your liabilities to a third party as well as your personal damage if you have comprehensive coverage.

The downside is that auto insurance can often cost hundreds or thousands of dollars a year, but there is an easy way to get a discount — utilize electronic automatic billing discounts offered by most insurers. These automatic payments can help lower your cost significantly.

What is an Electronic Automatic Billing Discount?

Electronic automatic billing is an option from almost every online insurance company. It allows the insurance company to bill you digitally rather than through traditional mail and withdraw the funds for your premium monthly, quarterly, or semi-annually. The guarantee of timely payment is enough to incentivize most insurance companies to offer a 5% – 10% discount on premiums.

The electronic automatic billing discount works by setting up automatic EFT payments for monthly premium payments. These automatic payments allow the insurance company to withdraw from your bank account the amount of the premium.

There are a few benefits to setting up automatic payments for auto insurance. Firstly, you can receive a discount on the cost of your insurance that averages 5% – 10%. This means that your insurance could drop hundreds of dollars just for having automatic payments.

Secondly, with automatic payments, you can ensure that there is no lapse in coverage. A lapse happens when you do not pay your premium, and the insurance company cancels your coverage. Driving without insurance can have serious consequences. If your coverage lapses and you get into an accident, you may not have the financial backstop offered by an insurance policy.

Lastly, by using the paperless billing method, you are alerted via email and account alerts when your insurance payment is going to be withdrawn and when you are up for renewal. This ensures you do not miss anything in the mail, nothing is lost, and these important notices come right to your personal device.

Read More: Best Auto Insurance Companies That Don’t Charge Late Fees

Qualifying for an Electronic Automatic Billing Discount

Eligibility for this digital discount is straightforward — you just need an email address, bank account, and routing number. When you decide on the right insurance quote to move forward with, you will go through the billing specifics and have to select automatic billing as your payment method.

Your payment will be due monthly on the day you started your coverage. For example, if you started your coverage on the 18^th of the month, your premium payment will be withdrawn from your bank account every month on the 18^th. If you miss a date by not having the funds available in your account, there is usually a 10-day grace period where you can login and set up a payment.

Once you select automatic billing, the discount will be applied to your account immediately, and you will see the monthly premium go down. Insurance companies make this process very easy and straightforward to help encourage consumers to enroll.

Many insurance companies that quote online also offer this discount right on their website. Major brands such as Progressive and Allstate all have these options in the billing section of their websites or your policy portal. You will likely need to enter your vehicle and personal auto information in order to have a quote issued.

How to Take Advantage of an Electronic Automatic Billing Discount

If you already have an insurance policy, you can still take advantage of this discount. Many companies will offer a pro-rated discount on all remaining months. If you work with an insurance agent, you can call your agent and ask if your current insurance company offers electronic automatic billing discounts.

You should be able to enroll immediately with just your bank account number, routing number, and policy information, or your agent can assist you with enrollment. If you buy your insurance directly from an insurance company, such as Progressive, you can call their customer service line or go through their online portal to set up automatic payments.

If you aren’t sure if you want to set up recurring payments for your insurance, you can always look at the discount that is provided and decide if it is worth it. When you are in the billing section of your policy, you will be able to see the exact amount you will save for enrolling — typically between 5% – 10%.

If you get multiple auto insurance quotes, you can also compare the discount offered for automatic billing, and it’s worthwhile to check all auto insurance discounts offered to make sure you are taking full advantage of any discounts.

Common Auto Insurance Discounts

If your current insurance company does not offer an automatic payment discount, it might be worth looking into another company for a quote. Consider looking for the same coverage from a company that offers an automatic payment discount as it might net out to be less premium per month, but make sure you evaluate your auto insurance quotes to ensure the coverage is the same.

Another great way to save is to bundle your auto insurance with other insurance products such as homeowners, renters, or even other vehicle insurance. By purchasing multiple policies from one insurance carrier, you are able to realize savings that could be worth hundreds of dollars a year. It is worth looking into a company that can quote all your insurance needs and offers discounts for bundling.

Read more: How to Get a Homeowners Auto Insurance Discount 

Lastly, there is always the option of increasing auto insurance deductibles to lower your overall insurance cost. Your deductible is the dollar amount taken out of an insurance claim and can range from nothing to thousands of dollars. Insurance companies like their insureds to have higher deductibles as it insulates them from smaller claims and makes the payout in the event of a large claim smaller.

If you take a higher deductible, you take more risk, but an insurance company will reward you for taking that risk in the form of a lower premium. You should consider your own financial situation, risk tolerance, and reduction in premium when looking at higher deductibles.

Electronic Automatic Billing Discount on Auto Insurance: The Bottom Line

There are many benefits to electronic automatic billing that you can explore when shopping for insurance. Premium discounts average between 5% – 10% for having automatic withdrawals, you can make sure you do not have a lapse in coverage, and it offers a more convenient way to communicate with your insurer.

To qualify for an automatic payment deduction, all you need is a bank account, routing number, and a company that offers this option. Automatic Payments are a great way to lower your premium and ensure you never have a lapse in coverage leading to an uninsured claim. It is recommended that you reach out to your agent or insurance company and see if they offer this discount.