Will most insurance companies refuse to issue a policy without the agent collecting the downpayment up front or generally will they issue a policy and bill for the downpayment?

Tony, Ohio, State Farm

Dear Tony,

Phil Supple, a spokesperson for State Farm, says that if you go to a State Farm agent looking to switch insurance companies, the amount you'll owe up front will depend on the payment plan you select. Essentially, you'll owe your first payment when you sign the policy. Payment arrangements — be it monthly withdrawals from your checking account, quarterly, or a yearly lump sum payment — can be made. Supple adds that there is an exception when you choose the monthly plan that doesn't draw on your checking account; you'll owe two months.

However, if you are buying a home, and your mortgage holder says you must show proof of insurance, you'll need to pay for the entire year. After that, State Farm would send your lending institution notice that you're insured.

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Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.