Returned EFT Auto Insurance Payments
Consumers should be weary of the consequences associated with having payments that
are not honored by their bank when their auto insurance policy is set up on automatic payments. Although there is significant savings in the billing fees, having multiple payments that are not honored could easily cost more that setting the auto insurance policy up for a direct bill installment.When the payments come back for insufficient funds, the insurance company will charge the insured a fee. These fees are generally between 20 and 25 dollars. The insured will also be charged from their own bank or financial institution a fee between 25 and 35 dollars. The total fees from a single payment that is returned can often be as high as 60 dollars. This more than offsets the savings on the policy of having the installments taken directly out of the account.
Another issue that arises often is when a client has dishonored payments more than one time. For these clients insurance companies will often request that the client pay the remainder of the policy term off in full or change the billing cycle to a direct bill policy.
Often times the insurance companies offer a lower down payment for policies that are going to be paid on automatic payments. These policies that are converted to direct bill many times send the consumer a bill that is significantly higher than expected. It will often include the difference in the percentage of premium associated with the down payment on the policy, the current bill amount, and the fee that was placed on the policy for dishonored funds.
Consumers that elect to have the payments automatically taken out of their account should proceed with caution and ensure that the funds are available every month without exception.
Returned EFT Auto Insurance Payments
By: Paul Woodward