skyinsurance
Member +
Hi all,
I am going to make this as simple as possible as it seems to cause a bit of confusion. This is a read and take note thread, not a discussion thread.
If you are insuring through a broker and are unable to pay for the insurance premium in one go, you will usually be offered a monthly payment instalment option.
It is worth noting that a lot of insurance brokers will outsource their monthly instalment payment option to an external credit broker. The credit broker are a completely separate company to the insurance company, in simple terms, they lend the customer the funds to pay the insurance company in full for the insurance policy. The customer is therefore taking a loan to pay for their insurance and are entering into a year’s credit agreement to pay that loan back.
A few points here:
1) If you cancel the policy you may still be left with instalments to pay
2) If you miss a payment you will probably be charged
3) Crash you car one week into the insurance policy – you will still have to pay off the loan
Why do insurers use credit agencies?
Not everyone can pay for their insurance in one go. Brokers need to have an option where payments can be spread across the year otherwise customers would not be able to pay for their insurance. Some brokers will offer their own instalment options, it is worth asking about these before entering into a credit agreement with a separate company.
Some suggestions:
1) Pay for insurance in one go by credit card/cheque
2) Pay via the broker in-house option
3) Check your payment dates are correct to avoid missing payments
4) Check your insurers cancellations rates (in terms and conditions of policy paperwork)
One final point. Before you cancel your insurance you need to check with the finance company if there is an outstanding balance.
I am going to make this as simple as possible as it seems to cause a bit of confusion. This is a read and take note thread, not a discussion thread.
If you are insuring through a broker and are unable to pay for the insurance premium in one go, you will usually be offered a monthly payment instalment option.
It is worth noting that a lot of insurance brokers will outsource their monthly instalment payment option to an external credit broker. The credit broker are a completely separate company to the insurance company, in simple terms, they lend the customer the funds to pay the insurance company in full for the insurance policy. The customer is therefore taking a loan to pay for their insurance and are entering into a year’s credit agreement to pay that loan back.
A few points here:
1) If you cancel the policy you may still be left with instalments to pay
2) If you miss a payment you will probably be charged
3) Crash you car one week into the insurance policy – you will still have to pay off the loan
Why do insurers use credit agencies?
Not everyone can pay for their insurance in one go. Brokers need to have an option where payments can be spread across the year otherwise customers would not be able to pay for their insurance. Some brokers will offer their own instalment options, it is worth asking about these before entering into a credit agreement with a separate company.
Some suggestions:
1) Pay for insurance in one go by credit card/cheque
2) Pay via the broker in-house option
3) Check your payment dates are correct to avoid missing payments
4) Check your insurers cancellations rates (in terms and conditions of policy paperwork)
One final point. Before you cancel your insurance you need to check with the finance company if there is an outstanding balance.