What is a car insurance deposit?
A car insurance deposit is an amount of money requested by the insurance company to begin coverage. Usually, an auto insurance deposit is the first month’s or a partial amount of the annual premium. Some car insurance companies do not require a deposit from drivers with good driving records and exemplary credit scores. Scroll down to learn more and compare quotes from different insurance companies.
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UPDATED: Jun 4, 2021
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When an individual purchases car insurance, a payment is made to obtain the policy. Finding a cheap car insurance premium can be difficult but is made easy by making time to research quotes will give you a better chance to find the best price.
For example, if the individual purchases a policy and agrees to pay monthly premium payments, the car insurance deposit may be calculated as two months of premium payments. However, car insurance companies may charge as much or as little for a deposit as they choose.
Some car insurance companies will start coverage for an individual with just the first month’s premium payment.
Use a FREE online car insurance shopping tool to help in your quest for the insurance with the least expensive deposit. Simply enter a ZIP code into the shopping tool and quickly compare auto insurance rates for different companies.
From the comparison tool, individuals may also request free quotes and more information from each insurance company returned in the results. Request additional information from each desired company about the deposit required to implement a new policy with them. From there, compare and get the best deposit deal.
Are Deposits Always Required for Car Insurance?
In some cases, the car insurance company may not require a deposit at first, and may bill the new policy holder for the payment. This procedure most often happens when the customer is known to the agent or company, or if the individual has an exemplary credit score. If the individual has agreed to pay semi-annual premiums, the insurance company may provide coverage and then bill the customer for the premium payment.
Most of the time, however, a car insurance company requires a portion of money to begin coverage for the policy holder. Consider that you will need to pay a portion of your premium, at least, in order to obtain car insurance. This applies to those who purchase their policies from neighborhood agents and those who purchase their policies online.
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Shop Around for the Best Deposit and the Best Policy
When considering a purchase of a car insurance policy, looking at a car insurance comparison will give you the best options. In fact, don’t you shop around for the best deal when it comes to electronics, appliances, furniture and other goods?
Just like with other products, car insurance companies charge different rates for similar policies. Also, different insurance companies request deposits that widely vary. Shop and compare auto insurance rates and research how much each company charges the new policy holder to start coverage. Chances are, you will find a wide range of choices for rates and deposits.
Wise Choices When Looking for a Policy
Determine the type of policy you need. Do you need a liability policy or full coverage on your car? The liability policy is the minimum coverage type required to legally drive in most states. No-fault states generally require the driver to carry a certain amount of liability insurance that protects them in case of an accident.
The liability policy covers the other driver in at-fault states, if you are in an accident.
Full coverage is needed for those individuals who make a car payment to a bank or finance company, and those who lease their cars. Leasing companies and loan servicers require that those who have loans or leased cars carry full insurance coverage that will pay the company back in the event of an accident or loss of the vehicle.
When you are prompted, select the type of policy you are searching for and submit the form. You will receive a list of car insurance companies that offer the type of coverage you are looking for, in the area where you live.
Request free quotes from your selected auto insurance providers. Many comparison sites allow users to request free quotes right from the site with a click of a button. Request information about the deposit you will need to initiate coverage. In many cases, the information that is provided by the comparison site will indicate the amount necessary to start coverage on a policy.
Select the car insurance companies that offers the best coverage at the best rates.
Use the deposit required as a criterion for determining exactly the best policy for you. The best policy for your needs may not be the one that requires the least amount for the deposit. You will need to make a decision considering that the deposit is only one factor in getting the best rates.
Shopping for car insurance may save over $1000 per year, depending on your policy type. Shopping around to find the best rates for a year of coverage is the best way to determine the best deal. Purchase the auto insurance policy that best meets your needs and fits your budget.
How to Research Car Insurance Rates
FREE Car insurance shopping tools are available online that will help an individual quickly compare and contrast various car insurance companies, rates and policies. To use these comparison tools, simply enter a ZIP code into the tool. Based on the zip code, a list of auto insurance companies that provide coverage in the area is returned. Many comparison tools allow the individual to quickly scan rates for each company for a similar type of policy, such as a liability policy.