Home insurance customers who spread the cost of premiums by paying monthly do not have to pay more for the privilege, moneysupermarket.com has said.
Many consumers opt to pay a monthly premium for their home insurance rather than paying it in a lump sum because it makes it easier to budget, but this often comes with a price which pushes up the cost of premiums.
This added expense can make the policy as much as 22 per cent more expensive, the comparison website has found, but it urges consumers to compare home insurance quotes, which can save as much as £131.
Most home insurance providers charge for paying monthly – an average of 10 per cent of the original premium – but some do not, and shopping around can save money, whether this saving comes from interest-free instalments, finding the lowest interest rate, or from a cheaper premium which counteracts the added cost of paying monthly.
Julie Owens, head of home insurance at moneysupermarket.com, said: "We are all looking for ways to cut our outgoings and make our finances more manageable." But, she added, "While this may be more convenient compared to forking out for the whole year's cover, it is crucial to make sure you're aware of any additional cost and ensure that you scour the whole market to find the most reasonably priced deal."
Rather than taking the hit of paying more for home insurance, Ms Owens suggests that consumers consider using a credit card which offers zero per cent interest on purchases, and then pay that off in instalments instead.
Ms Owens added: "By putting the cost of the premium on to a zero per cent purchase credit card, Brits would be able to pay for their policy in monthly instalments without paying interest.
"A word of warning through, it's important to be very careful that you do pay off the total cost of your premium within the zero per cent period, as if you don't, you could incur higher interest rate fees of 18.9 per cent APR on the whole cost of the premium, not just the balance."
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