DO you pay for your annual home insurance by direct debit? If you do, then you may be much better off if you were to switch to genuine monthly home insurance. There are lots of good reasons, including saving money and better insurance cover to stop paying annual insurance on direct debit and going to monthly home insurance.
So what are the differences between annual and monthly home insurance? The obvious one is that if you pay for an annual policy it lasts for 12-months. Typically it will cost around £200 for a property in the UK. If you buy monthly home insurance, it lasts for a month only and will cost around £16 per month – or £192 per 12-month period. The difference here is that if you cancel your policy after three months, there will be charges and administration fees on the annual policy – there will be no extra charges on the monthly insurance, it will simply lapse.
And the direct debit is another charge you will avoid on the monthly home insurance. It costs nothing to set up and stop. On an annual home insurance policy the direct debit will end up paying for a credit loan for the annual policy and be at an APR of anywhere between 10-100%. You are pounds in by choosing monthly home insurance for this reason alone.
And then you get to the cover offered on annual and monthly policies. Annual policies can cover just about anything you want. But it all costs, so if you want to include freezer contents and cameras against accidental damage, then the price will go north from the £200 average. Monthly home insurance is a set policy with coverage at certain levels. In my mind those levels are good – £500,000 rebuild value will cover 90% of all UK properties. £50,000 contents is the same, there are not many homes with more cover required and if you own one of them, then chances are you are not looking at monthly home insurance anyway as direct debit will not feature.
The beauty and advantage of monthly home insurance is it incorporates emergency cover as standard. Normally you’d pay around £70 to add this to an annual home insurance policy but get it free with monthly. If your boiler breaks down or your electrics fry, then you call a helpline and it is sorted for you. This is really comprehensive insurance.
So monthly home insurance offers complete flexibility, no direct debit fees, short term cover if needed, wide values to meet most homes and incorporates emergency cover as standard, all at a price similar to annual policies if paid for 12-months. Why would you choose an annual policy over that? Beats me.
Get your monthly home insurance HERE.
The Property Insurer