"Monthly home insurance repayments don’t exist." - oh yes they do!

gromituk

WARNING! Don’t Ever Say Yes to Monthly Repayments!

Monthly home insurance repayments don’t exist.


Having read this in the home insurance article, I checked again with Nationwide (having done so in the past) and they assured me that if I paid annually I'd pay exactly 12 times the monthly payment (give or take a few pence for rounding). So this advice is not correct in all cases - can it be amended please?

BenL

As do Abbey home insurance policies - no charge for monthly premiums.

Its a selling feature they use.

Ben

ijrussell

Barclays offer it as well

gromituk

Of course one could ask them "ok then - how much discount are you going to offer me to pay annually?" but I don't suppose you'd get very far if you don't have an alternative, cheaper, quotation at the ready. I tried the scraping websites mentioned in the article. One refused to work with my browser at all, and the other returned a mixture of inabilities to quote and rejections cos I said I have a 10m tree within 5m of the property. The tree's probably a bit less than 10m, and I can trim it, so perhaps I'll try again later if I can be bothered.

Savvy_Sue

Did you also ask the question "What happens if I cancel my insurance part way through the year?" If the answer is "That's fine, you can just stop paying" then your advice is correct. If the answer is "You'd still owe us for any months less than 12 for which you haven't paid" then your advice is not correct.

I know that if you're paying your car insurance by monthly instalments you keep paying until the end of the year, even if you write the car off part-way through. Of course the answer to the question I posed above may vary according to whether you're cancelling the policy before or after making a claim. But it's still a question that needs to be asked.

gromituk

Savvy_Sue wrote:

Did you also ask the question "What happens if I cancel my insurance part way through the year?" If the answer is "That's fine, you can just stop paying" then your advice is correct. If the answer is "You'd still owe us for any months less than 12 for which you haven't paid" then your advice is not correct.

Interesting point, but the warning in the article is about paying large amounts of interest on monthly payments, i.e. paying a different amount overall if you pay monthly. You still enter into a contract to take the insurance for a year, so I'd be very surprised if any company would let you cancel it part way through, whether you elect to pay monthly or not.

Savvy_Sue

gromituk wrote:

Interesting point, but the warning in the article is about paying large amounts of interest on monthly payments, i.e. paying a different amount overall if you pay monthly. You still enter into a contract to take the insurance for a year, so I'd be very surprised if any company would let you cancel it part way through, whether you elect to pay monthly or not.

I'll confess I haven't read the article but from what you're now saying it sounds as if the change which needs to be made is to make it clear that MOST companies (but not all) will charge you through the nose to pay in instalments. Interestingly there's another recent thread which suggests that at least some household policies do let you enter into a monthly contract, as opposed to car insurers who do expect you to pay the policy up for the full year even if you cease to need the insurance while paying in installments. If I find the thread I'll put a link to it in due course!

gromituk

Yes, I agree with that.

Savvy_Sue

Savvy_Sue wrote:

If I find the thread I'll put a link to it in due course!

This is the thread I was referring to, specifically post 4, from dunstonh. Who seems to know what he is talking about on insurance matters.

mrsw

Virgin offers monthly payments at no extra cost too.

gromituk

Until I have alternatives, I can't really ring up my insurer and suggest it drops its prices. I'm finding alternatives hard to find though: one of the sites in the article refused to work with my browser (nothing short of pathetic!) and the other said all the companies it used were either uncontactable or said my rebuilding cost was too high. Seeing as I copied that figure straight from the renewal form of my current insurer, I find that rather odd.