Interest on Home Insurance

supersavor

Hi im looking for some advice my mums insurance policy is up for renewal soon and she is with legal and general .
I noticed as part off the annual fee of £256.00 she is charged 23.00 interest as part of this amount as it is paid montly What i want to know is this normal

thanks

adamc260

A lot of companies charge extra to pay monthly so yes I would say it's normal.

hcb42

Very normal!

ACG

My car insurance cost about £70-80 extra because i decided to pay it monthly. Its not uncommon.

*Scarlett

It's normal to be charged interest on monthy payments.

Some companies don't charge but clearly you have to look at the over all price.

£23 does't seem outrageous depending on the policy price ie it would be for a £50 contents only policy!

Check the comparison sites and with insurers directly - they should clearly state polcy prices and charges.

castle96

think you will find ? it is 23 per cent, not £23 pounds,, charged

InsideInsurance

You are basically getting a loan for the insurance premium (and in some cases are actually getting a loan if a 3rd party finance company is involved) and therefore like a loan you'd get from the bank an insurer will in most cases charge you interest in return for you getting a loan.

The interest rates tend to be high because there is a much higher rate of people not paying their premiums in full for those paying by DD with the classic being people simply cancelling their DD to stop their insurance rather than actually cancelling the policy or to avoid cancellation fees etc (see the hundreds of threads on here about it). You are therefore better off finding alternative credit where appropriate or seeing if a more expensive insurer offers interest free credit/instalments as the total price may be cheaper.