Monthly automatic chequing (MAC) is a payment plan used by the insurance companies to finance premiums. It is usually set up with two month paid premium as downpayment followed by 10 withdrawals.

This puts the you, the insured in the position of always paying one month in advance. A void cheque or bank authorization is required and a form completed by you for the insurer which authorizes the withdrawals.

There can be significant penalties for non sufficient funds (NSF) on the date of withdrawal. These can range from $250 to $100 per instance. This also affects your ability to get credit payments from the insurers.

Some companies will charge from 3% - 6% service fee for this program. Some will provide it for free - they want your steady monthly premium payments.

Find the plan that best suits you. With personal insurance rates on the rise a difference of 3% could be helpful in keeping your costs under control.