26 Mar 2025

How to spread the cost of your insurance

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Whether you drive for private hire or delivery, insurance is an essential factor of doing business. Fortunately, there are ways of helping you manage the cost of a policy.

When you need to buy or renew your private hire or delivery insurance, you can choose how long you want your policy to last.

  • 30-day coverage means your insurance is flexible. At the end of 30 days, you can either renew or stop your cover. This suits part-time or seasonal drivers, as there's no annual commitment.
  • Annual coverage suits regular or full-time drivers, as your insurance is sorted for the entire year. By paying once for the year ahead, you don't need to worry about gaps in coverage for the duration of your policy. Plus, annual policies often work out cheaper than 12x 30-day policies.

Some drivers like the idea of annual insurance, but would struggle to pay the entire cost upfront. To help with this, some insurance companies, including INSHUR, offer a ‘premium finance’ option.

This is a way of paying for your annual insurance by spreading the cost over monthly payments.

Here we explain how premium finance works, and what to think about when deciding if premium finance is right for you.

What is premium finance?

Premium finance is basically a loan. It allows you to take out an annual policy, but spread the cost over monthly payments.

If you choose premium finance, you’ll pay a deposit to your insurer to start the policy. Then a finance company will pay the rest of the cost for you, which you’ll then pay back each month.

At INSHUR, you pay a deposit followed by 11 monthly payments.

How is premium finance different from 30-day cover?

With 30-day cover, as with annual cover, prices can change when you renew. However, unlike annual insurance, the price you pay may change every month. This is because you are essentially buying a new policy every 30 days.

While 30-day cover is good if you want to work flexibly, you have to renew every month you want to work.

A driver or rider working regularly throughout the year using 30-day policies would have to renew 12 times. This comes with some downsides, including potential lapses in coverage if you forget to renew each month and the previously mentioned price changes.

What are the benefits of premium finance?

Premium finance can make it easier to budget, because you know what your payments will be every month.

Paying for your insurance this way also means your cover is sorted in one go. Once your monthly payment is set up, as long as the money is in your account, you’re good to go.

It’s worth pointing out that if you can afford to pay for your insurance in full for the year, this could be more cost-effective for you. Premium finance is more expensive than paying upfront for the year – this is because you are taking out a loan for the cost of an annual policy.

But while it costs more, it does mean you’ll know what you’re paying each month. Unless you’re changing your policy, you’ll have peace of mind that the price will stay the same.

Another benefit is you can change what day you make the payment. For example, if you start working for a different app and your payday changes, you can move the payment date to suit you.

There’s also the option to make other changes.

Let’s say you want to change your vehicle, which might add extra costs to your insurance. That extra cost can also be spread over monthly payments. For example, an extra £500 for a new car or van might work out at an extra £50 a month. This can help to manage extra costs and help you decide things like whether you can afford a new vehicle or not.

Things to think about

As premium finance works like a loan, make sure you can afford the monthly payments. If you miss payments, your policy might be cancelled and you won’t be insured.

Comparing the cost of insurance can be tricky, especially with all the jargon you see. There are two words that come up most often:

·       Interest When a finance company provides a loan, like with premium finance, it takes a risk. Because of this, they charge a percentage on top of the money being loaned. This is the interest rate. Think of this rate as the cost of borrowing money.

·       APR This stands for annual percentage rate, and is worked out based on how long a loan is for. It is the annual rate charged by a finance company to lend money to borrowers.  

If you’re interested in the details, it’s worth looking at both the interest and the APR.

By using premium finance, you spread the cost of insurance over a year. This can make it more affordable than trying to pay for a year’s cover in one go.

 

At INSHUR, we want to make drivers’ lives easier. This includes offering payment options like premium finance. To see how we can help you, visit INSHUR to see how we can help you as a private hire driver or delivery driver. You can also find out more about premium finance here.