What are installment fees?

An installment fee is the small charge per payment you make on your home insurance premium. The fee covers the service cost of processing the additional payments on a monthly, quarterly, or bi-annual basis. Almost every insurance company charges this fee unless you pay for your policy in full each year.

With Kin, you’ll notice you save a little more overall if you don’t pay for your policy in installments. That’s because California is charged $7 per installment payment. On Florida homeowners insurance, there’s a $3 charge per installment.

How paying for your policy in full saves you money

The tiny installment fee doesn’t seem like much at first glance, but it does add up a little. If you choose a 4-pay plan for your California home insurance, for example, that’s $21 extra in processing fees (you don’t get charged for the first installment).

The best way to avoid these fees? You can choose to pay for your annual premium in full. While breaking the premium up in installments may be easier to budget for in the short term, it’s important to note that it doesn’t save money in the long run.

Why do insurance companies charge installment fees?

Insurers charge installment fees for two main reasons:

1. It covers each additional credit card processing fee. Each time your insurance company runs your credit card, their servicer charges them for the transaction. Your installment fee offsets that charge.
2. It ensures they can keep offering budget-friendly installment plans. If a company didn’t charge installment fees, it would be unfair to policyholders who pay in full. For example, if you chose a 4-pay plan and your company didn’t charge a fee to cover transaction costs, the insurer would be covering $21 they didn’t cover for one-time payers.

Other fees you may see in your premium breakdown

Some policies include other types of servicing fees, and these vary from insurance company to insurance company and state to state. In the spirit of full transparency, here are our fees for our California homeowners insurance policies:

• The premium. This is what your policy costs for the coverage alone.
• MGA fee. This is a one-time administration fee for all California policies. In California, we operate as a managing general agent, and this fee allows us to offer specialized coverage we wouldn’t be able to offer otherwise.
• Inspection fee (if applicable). If we require an inspection in California, there is a one-time inspection fee. Exterior Inspections are $24, exterior and interior inspection are $44, and if you have a high-value home, the inspection is $175. A wildfire inspection is $64.
• Installment fee. Again, in California, this is a flat $7 processing fee for each additional premium payment beyond the first.

Our fees are never hidden. If you have any questions, please contact us at support@kin.com. We’re an open book!