Monthly versus Annual Insurance Payments

In most cases, motorcycle insurance companies will offer the option of paying your premium on either an annual or a monthly basis. This is assuming that you are purchasing a one-year insurance contract. If you chose to buy insurance for a shorter period than that, say six months, then you your payment option will be to either pay it at the beginning of the six months, or in six monthly installments.

The advantage of a monthly payment is that it allows you to spread the cost out. This is especially beneficial to people who do not have large lump sums of money and need to be able to pay their bills as their paychecks arrive. On the other hand, if you only have to pay once a year then you can literally pay for it and forget about it. If you have monthly payments and forget to make one on time then your insurance could lapse and if you have an accident before you make the payment and get it reinstituted then they could refuse to pay on it. It is possible some companies could offer you a slightly lower premium if it is paid all up front.

One year contracts cannot be terminated before the year is up unless the contract provides for it. So if you select monthly payments and then smash your motorcycle into a pole so that it’s a total write-off, or if it gets stolen, then you could still end up paying for insurance for a bike you no longer have. If you have a comprehensive policy for your bike, then your insurance company should pay you to replace it, but if you opted to only purchase third-party insurance then that cost will be on you. Either way, if you sign a one-year insurance contract then you will have to pay for one full year of insurance.

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