anyone heard of Geico's "premium installment charge?"

[markusk]

Recently moved from the east coast to the Bay area and purchased a new car. We've been a Geico customer for about 12 years for our cars - we pay twice (about $450) per year.

This month we got our 2008 policy renewal bill, but there was a curious item called "Premium Installment charge" of $4. I've never noticed it before.

Called customer service today to inquire about it. Nice women explained that our car insurance policy is on a monthly payment schedule, which was changed when we moved -- basically our twice per year bill divided up by 6 (months). Because of this option, we are charged $4 extra every 6 months.

???!!!!

Told the nice lady that we've always paid the entire amount and never needed to split the bill by month (I can't imagine writing so many checks or electronic payments!). Turns out we paid the extra $4 six months ago without realizing it.

The confusing part of the bill was that on the slip that you send in with the check, the bill is written as "total amount due by Dec 20th." It does not say "less $4 if paid in full" -- like I would have expected. Anyway, the nice lady refunded an extra $4 for us and decreased the by another $4.

Hope no one else is paying extra!!

[PauletteGoddard]

The installment charge is not new. It used to be a little over $3, however. I send my payment for every six months, so GEICO refunds me an installment charge.

FWIW I have been a GEICO customer for almost ten years.

[jasanderson]

I think these fees are pretty common. I have had a couple different insurance companies and they all charge random fees if you don't pay your bill in full. I think the most interesting one I have came across so far is Progressive. We had them about 2 years ago and if you set up a monthly payment schedule with them you ended up paying about twice as much as if you just paid the full six months.

Currently we have AIG whom I love. They are the cheapest by far from what I have found and our rates in MN are pretty high.

[markusk]

I guess I'm not surprised that there are such fees, but what got me was how the detach-and-return portion of the bill highlighted "current balance" with the most current due date but included the extra fee (not itemized). It is only itemized once at a different portion of the bill.

I think I'm like most people...I just look at the current balance amount and the due date and just pay the bill on time.

I've had other bills that specifically states something like "if paid on this date, pay amount x; if paid on this date, pay amount y;

For me it's subtle, but important. Or may it's just me. I like it simple Anyway I"ve been happy with Geico overall....

[dmontngrey]

My insurance company (not Geico) charges a $3 per month fee if not paid in full. I discovered, quite by accident, that if I get one month ahead they will advance my payment due date by one month. By doing this, I am never charged a monthly fee and this saves me $3 over 9 months = $27 per year. I just have to double up the first payment and then pay one month's bill until paid in full. I love this loophole!!

[Hypersion]

Both my last (mercury) and my current (wawanesa) charged very high fees when the bill was not paid in full for 6 (mercury)and 12 (wawanesa) months.

[jodi]

My prior insurance company used to charge $5/month if you pay in installments. I couldn't see paying $60/yr. for this privilege, so we just paid it all at once. Now I have it automatically deducted from my paycheck through my union, so there are no installment charges that way - plus I don't have to cough it all up at once. I love win-wins!

[Coleroo]

allstate charges 3$ per month for installment charges...i think state farm charged around 2$ a few years ago when i was originally with them.

[zetta]

Thanks for posting about this. We also pay semi-annually and just switched to Geico, so I need to check whether we paid $4 too much as well!

[Tree0164]

I have Arbella Insurance and they have a $4.00 montly installment charge. I try to pay it in 2-3 installments each year rather than monthly. Save me money that way.

[irmanator]

they will refund it automatically, by the way they are awesome if you have a claim. someone vandalized our car in august on sat night we noticed it sunday got a rental car same day and a check 2 days later.

[St. Theresa]

You're obviously paying for their incessant TV commercials with the talking Gecko.

[irmanator]

maybe but everyone i know has saved a few hundred by switching.......

[poundwise]

GEICO saves some people money, however, their rate was not the lowest for us. In fact, the last time we shopped rates, GEICO was the third lowest among national carriers.

It is worth note of caution to consider, when comparing rates, that you are comparing apples to apples. Check all the coverage areas and the amounts to see what you are getting from each insurer. Also, it pays to have a decent company, not necessarily the lowest rate, when it comes time for a claim, etc. There are several sources, such as JD Power, that rate customer satisfaction with insurers.

As for the OP: Every company I've been with has a charge/fee if you pay in monthly installments. Additionally, you can often get a discount if you pay six months in full or annually. This makes paying in monthly installments comparably even more expensive.

[jasanderson]

Try AIG - I have found them to be the cheapest of all of them.