When my husband and I moved to New Jersey, I was in a rush to get auto and homeowners insurance policies bought and out of my hair. More than anything else in my own personal finances, I hate dealing with insurance. Especially for cars. Not only can shopping for coverage be confusing -- with many choices to make and many companies to compare -- but I'm just not a car person. To me, anything dealing with my car is a hassle.
So when my real estate agent, who's also a long-time friend, recommended I call her insurer -- Liberty Mutual -- I was quick to throw comparison shopping to the wind. I figured, after I was moved into my new home and the boxes were unpacked, I'd find some time to make sure I was getting the best service and the best price for my insurance dollars.
Getting the policies was easy enough. The cost was reasonable -- only slightly higher than what I was paying for coverage before I moved. I sent in a down payment check for the coverage and went on with the rest of my life.
Until the first bill came.
Instead of paying for a year of coverage, I'd elected to pay monthly installments. For the convenience of paying this way, most insurance companies charge between $1 and $4 for each monthly payment. I was paying $3 per installment with my old insurance company, and I was expecting a similar charge from Liberty Mutual.
Instead of a convenience fee for monthly installment payments, the company was adding a finance charge on the unpaid balance -- 1.25 percent a month, or 15 percent a year.
I couldn't believe my eyes. I don't even keep a balance on my credit cards -- now I should pay interest for an insurance policy?