Buying a car insurance policy is like making a contract between you and an insurance company. You promise to pay a certain amount of money on a regular basis. They promise to pay for specific car-related expenses as long as the policy is in effect. Before we get into more detail, let’s define some basic car insurance terms. PREMIUM The premium is how much you will be charged for each type of coverage you choose – basically, how much this whole thing is going to cost you. Looking at premiums can help you compare insurance offers and identify possible savings opportunities. Most insurers will give you options for paying your premium, such as paying all upfront or making a down payment (often 2 months worth) and then paying the rest in monthly installments. POLICY PERIOD Your insurance coverage is only in effect during the period specified in your policy. Typically, auto policies are in effect for six months or one-year terms. When you are shopping for insurance, be sure