The variety of home and motor insurance coverage clients counting on credit score to pay for a number of insurance policies has elevated previously 12 months, new analysis from Premium Credit has proven.
The agency’s insurance coverage index, which was printed yesterday (8 November 2023), confirmed 48% of customers used some type of credit score to pay for motor cowl in October, up from 40% throughout the identical interval in 2022.
And 49% of adults had used credit score to take out a home coverage, a 9% enhance from October 2022.
It was not simply the home and motor sectors that noticed rises, nevertheless, with Premium Credit seeing will increase in the usage of credit score for all classes of insurance coverage it covers, akin to life, pet, well being, journey, essential sickness and specialist insurance coverage.
Some 32% of adults blamed the rise on cost of residing pressures, whereas 18% additionally cited the affect of vitality payments and premium will increase.
“There has been a sharp rise in the number of people turning to credit to pay for one or more insurance policies as the cost of living pressures continue to tighten budgets,” Adam Morghem, Premium Credit’s technique, advertising and communications director, stated.
“The increases have been particularly notable in car and home insurance, but the rises are across the board underlining not only the importance of credit in the insurance market, but also the need to find the most efficient payment options available.”
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The survey was carried out utilizing a pattern of 1,073 customers aged 18-plus between 6-9 October 2023.
Despite extra folks turning to credit score, the analysis additionally revealed that there have been points with being accepted for it – some 6% had been rejected for bank cards previously 12 months, whereas 5% had been provided a provided the next fee than the one they utilized for.
As a outcome, Premium Credit is advising clients to think about premium finance, which allows them to pay month-to-month for canopy as a substitute of in a lump sum.
“Premium finance is specifically designed for insurance buyers to conveniently spread the cost of insurance policies,” Morghem stated.
”Premium finance is a really cost-competitive means for customers to purchase insurance coverage and higher handle their funds. At a time when family funds are beneath strain, it may be a great different to different types of credit score.”
