The Price of Car Insurance

I purchased new car insurance a few months ago. As I was going through the sign-up process in-person, I was told I could pay the annual balance in full or pay month-by-month. Being a good personal finance blogger, I asked if there were any extra charges if I paid month-by-month and was told no, that I would only have to pay my full premium and I could get a 7% dividend back at the end of the year if everything is good. So, I paid a 20% downpayment and had officially purchased my very first installment of car insurance!

My first monthly bill came (last month) with no issues. However, this month's included a finance charge of 1.5% of the remaining balance. Huh?! I was never told about any finance charges! If it was a small $2 or $3 fee for the convenience of paying month-by-month online, I would be okay with it. But this was a lot more than that!

I called my insurance company this week and inquired about the charge. After being nice and letting the representative know that I never received any sort of notice or signed any agreement about it (she mentioned I should have signed a "Truth in Lending" form and received a copy of it), she eventually spoke with her supervisor and said if I paid the balance in full, that they would waive the finance charge. She also mentioned that I should call the office where I first signed up for my insurance and let the supervisor there know that I never received the notice. I kept letting her know that I felt misled, and of course thanked her for getting rid of the finance charge! The only problem is that it'll disrupt my cash flow a bit since it's a decent amount. I'm not 25 yet and live in California, so my car insurance is still somewhat pricey even with a clean driving record. But if it saves me a good chunk of money, I'd much rather do it!

How do you pay for your car insurance, in some type of installment or in one lump sum? Does your insurance charge you anything for paying a certain way?