Home insurance - Monthly payment interest rate unreasonable

Based on resolver’s experience to date, insurance companies offer you the option of paying for your insurance in monthly instalments rather than in one go to spread the cost for you. If you pay for your insurance like this be aware that the insurer is essentially loaning you the money to pay for the policy, so you pay the interest on that loan. Ideally, therefore, you should pay the entire cost up front. However, for many people this may put an intolerable strain upon their finances.

One way of making the cost of your insurance more manageable is to put the upfront annual cost on a purchase credit card that offers a generous initial interest-free period. But you will need to be disciplined enough to pay off the entire balance before the interest-free period ends. If you don't, you'll be hit by much higher interest payments than your insurer would have charged you.

If you are concerned about the interest rates which you are being charged for paying for your insurance monthly you should either seek other quotations and consider changing your insurance policy, or contact your insurer setting out your concerns as to the rate you are being asked to pay and seeking a reduction. This will be more effective if you can demonstrate that other insurers offer better rates, as it will demonstrate to your insurer that they will have to improve the value of their policy to retain you as a customer.

Resolver can help you resolve this issue quickly, free of charge and without the hassle. We can also help you with the next step of writing your complaint. Click on the link below to create your email.

If you can't resolve your issue within 8 weeks of making your complaint (or if you've received a 'deadlock letter' or final decision from the company), you can escalate your case to the Ombudsman.

Your complaint must be under 6 months old to be escalated to the Ombudsman.

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