The Benefits of No Deposit
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
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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