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[Kevin Wood]

I agree with you in some respect Entwood, but there are some insurance companies who have a clause that if you make a claim you must settle the balance of your premium in full

Admittedly, AFAIK, most of the big ones don't but some do

That's what I would expect, TBH. You have received the full benefit of the policy by making a claim. Why shouldn't you be liable to pay the full premium?

Another way to look at it... The premium for cover paid annually is calculated on the assumption that the money arrives in the insurance companies' coffers on day 1 of the policy. That money stays there for 365 days of cover, so that's 365 days the insurance company has to invest the whole premium and make a profit out of it.

If the premium arrives in dribs and drabs over the year the insurance company has much less income from investing your premium.

The insurance company must make money out of investing your premium (in addition to the premium itself) to cover their administration costs, generate a profit for themselves and cover the possibility that you or other parties might make a claim.

If you paid your insurance by instalments, the cost wasn't greater, and you put 11/12ths of the premium in an investment on day 1, paid the rest of the instalments out of the investment when due, at the end of the year, you'd have made a profit. Wouldn't everybody do this if the insurance company didn't charge more?

So, it's hardly surprising that the insurance company calculate a higher premium on a monthly basis than an annual basis.

Whether the difference reflects the real cost to the insurance company or whether they are charging you a premium for the convenience of doing so is another matter, but it's not at all surprising nor, IMHO, a rip-off, that they do.

Kevin

[Stallion]

The company i used to be with i paid around £450 but then they were taken over by someone else and wanted 3k! Admiral were still the cheapest. Hopefully the renewal will bring it down to 3 figures in November.

we had a similar problem.his last years insurance was around £580,when the renewal came this year it was £1500 and thats with a years no claims

Due to all the people not bothering, I also blame immigrants not having the correct licence or cover for pushing prices up.

Thats the least of their worries, its risen due to all the fraudulant claims which are on the rise every year for the past decade, not forgetting Personal Injury payouts.. 

[51M0N]

that is another factor yes.

[STMO123]

paying up front in a oner guarantees the money, with direct debits they can be cancelled, there might be problems getting the money, mistakes can be made - its just more of a risk to a company and more of a pain - the higher price reflects the fact theyd rather encourage you to pay up front instead 

That's absolute pap. Whenever a financial transaction takes place, if the option of finance is available, they would prefer you to take it. In the case of insurance, they stand to make huge profits, hence it is now covered by the consumer credit act of 1974.
When buying any item, such as a car, the seller is paid upfront by the finance company and the salesman receives a nice commision for flogging the finance.

I tried to pay cash for the wife's megane and they took half an hour rather around before they came up with a finance package that I would agree to. Anything but cash.

if you're buying insurance directly the company receives what you give it...they dont get money elsewhere, and we're not talking about finance we're talking about paying the premium upfront or by dd   

If you pay by monthly DD, you now receive an annual statement, which is exactly the same as your credit card statement. It tells you how much you paid each month and what the interest payment for that month was.
It also warns you about the dangers of missing payments, i.e. your credit history will be adversely affected or you may have to pay more interest.
It is, in effect, a credit agreement, just like a bank loan, and both you and the company have to treat it as such.

[dragonlord]

simplest way of looking at it and only way.

Is  just too relise the fact that all Insurance are robing bastards and you wont go wrong.

[Lazydocker]

I agree Kevin,

I know some insurance companies charge extortionate interest rates for monthly payments, but plenty don't

Incidentally... It appears that Admiral don't require payment up front if you make a claim

[Banjax]

I agree Kevin,

I know some insurance companies charge extortionate interest rates for monthly payments, but plenty don't

Incidentally... It appears that Admiral don't require payment up front if you make a claim

I've never heard of any reputable insurer asking for  money up front if you make a claim...sounds a bit mickey mouse if you ask me 

[Lazydocker]

I agree Kevin,

I know some insurance companies charge extortionate interest rates for monthly payments, but plenty don't

Incidentally... It appears that Admiral don't require payment up front if you make a claim

I've never heard of any reputable insurer asking for  money up front if you make a claim...sounds a bit mickey mouse if you ask me 

Very common... Norwich Union used to require it before they became Aviva, don't know now as I wouldn't use them if they paid me

[STMO123]

I agree Kevin,

I know some insurance companies charge extortionate interest rates for monthly payments, but plenty don't

Incidentally... It appears that Admiral don't require payment up front if you make a claim

I've never heard of any reputable insurer asking for  money up front if you make a claim...sounds a bit mickey mouse if you ask me 

Very common... Norwich Union used to require it before they became Aviva, don't know now as I wouldn't use them if they paid me

Aviva don't ask for anything.....literally   My wife crashed her car into another last year in the snow. She rang to tell me. I rang aviva and told them. 'Where exactly was the accident?' 

'Errr.....don't know...she was on her way to work, so somewhere in Sheffield.'

'OK. We'll send you a courtesy car to your home address tomorrow and take her car away for repair'.

'Thank you very much'.

At nine the next day they brought a lovely little skoda.