The Benefits of No Deposit Insurance
If you live in the UK, you may be wondering what No Deposit insurance is. Or perhaps you know what it is, but don’t know of the advantages No Deposit Insurance can have. Knowing the benefits of No Deposit Insurance can help you to determine if it’s the right type of cover for you.
What it is
Traditionally, everyone in the UK had to pay a lump sum for their annual motor cover. This lump sum payment was considered to be a sort of upfront deposit for a year’s worth of insurance protection. So basically, No Deposit Insurance is just a standard policy that requires no lump sum annual premium paid upfront. It’s still a yearly or bi-yearly insurance contract, but the annual premium can be spread out throughout the year. You simply set up an instalment payment plan of 1, 3, 6, or 12 monthly payments with the insurer.
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Many people assume that not having a deposit makes No Deposit policies cheaper than the traditional standard policies. However, No Deposit Insurance is not less expensive than the traditional yearly standard policy. The premium rate will still be based on an annual premium, determined by what insurance group the driver(s) fits into. The lower you insurance group’s risk rating is, the lower your premiums will be.
Although No Deposit Insurance is not any less costly than the traditional standard policies, it does offer a few benefits. Some of the numerous benefits of purchasing No Deposit Insurance are:
•Can make insurance more affordable to people on limited income, such as students and new drivers: It’s easier to come up with smaller monthly premium payments rather than one large annual lump sum premium payment.
•Permits better cash flow control for consumers: Consumers have control of their premium payments for longer time periods, and can choose how the money will be spent in case there’s an emergency and the premium has to be spent on something besides insurance.
•Offers an easy way to pay premiums: Most policies can be paid for with debit or credit card, or can be set up as monthly bill payment plan.
•Requires no upfront deposit or lump sum payment: Can start coverage right away just by paying the first month’s premium, in most cases.
•Makes getting refunds easier: Since you’re not paying an entire year’s premiums up front, you wouldn’t have to wait as long for a refund if you decided to cancel the policy.
• Makes cancelling or modifying policy easier: Since you’ll most likely be paying premiums on a monthly basis, you can easily revise your policies to more aptly fit your needs each time you make a premium payment. You can more easily cancel the policies too, if you no longer require coverage.
•Makes changing insurance companies easier: Since you can start a new policies simply by coming up with the first month’s premium, it’s easier to change insurers if you find a better deal.
If you are considering purchasing No Deposit Insurance, you should definitely do some comparison shopping. A recent survey has revealed that 85% of UK drivers pay too much for their motor insurance policies. This is mostly due to not shopping around for the best prices, and partly due to paying for services the driver may never use.
Fortunately, it’s now fairly easy to do comparison shopping. You don’t have to drive from place to place or make hundreds of phone calls anymore. The Internet now provides access to numerous insurance comparison sites. All you have to do is visit these web sites, fill out a few brief forms, and then interested insurers will contact you to present their offers.
Many reputable insurance companies also have web sites available to assist you in your search. Some even give discounts for purchasing online. Just be sure to visit at least five sites so you can get a wider selection of offers.
Even though there’s a number of insurers offering actual no upfront deposit policies, it’s still worth doing some comparison shopping. The many benefits of No Deposit Insurance are worthwhile, but are even better when you find the best deal possible.
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