"Nearly three out of four people use credit to pay for one or more insurance policies demonstrating the need to find the most efficient payment options available."
- Adam Morghem, Strategy, Marketing & Communications Director at Premium Credit
Of those surveyed (1,084), as part of Premium Credit’s Insurance Index, 50% use credit to pay for Car Insurance on a monthly basis, followed by Home Insurance (48%), Life Insurance (34%), Pet Insurance (26%), Health Insurance (22%), Travel Insurance (24%), Critical Illness (12%), and Specialist Insurance (10%).
The highest rise in customers using credit to pay for insurance monthly since 2023 was Travel Insurance – increasing from 15% to 24% in 2024. Notably, the number of Health Insurance and Specialist Insurance customers paying for cover with credit rose by 6% respectively.
Premium Credit found almost half (48%) of insurance customers value the ability to pay monthly via premium finance or finance offered by insurers. 19% said they use credit for all major insurance bills, whilst 14% use it for some insurance-related bills. The most common reason for valuing the ability to pay monthly instalments was budgeting (71%).
41% of customers who use some form of credit to fund one or more insurance policies borrowed more than they had in the last twelve months, compared with 38% who admitted to this in last year’s index. Of those who’ve borrowed more, 36% cited the Cost-of-Living Crisis as the biggest trigger; 24% blamed inflated insurance premiums and 14% said it was due to rising energy bills.
Credit cards remain the most popular form of borrowing (40%) but closely followed by finance from their insurers and/or premium finance (30%). However, Premium Credit’s Index has confirmed that 5% of customers were rejected for credit cards in the past year, and a further 5% were offered a higher rate than the one they’d applied for.
Furthermore, 11% of customers have not been able to make claims in the past five years either because they had no or inadequate cover – roughly a third (30%) of them missed out on claims worth £3k or more.
“Nearly three out of four people use credit to pay for one or more insurance policies demonstrating the need to find the most efficient payment options available. Credit is particularly important in the Car Insurance market where premiums have soared recently,” explained Adam Morghem, Strategy, Marketing & Communications Director at Premium Credit.
He said: “Nearly half of all customers value the ability to use premium finance offered by insurers to pay monthly for insurance policies although credit cards remain the most used form of finance amongst those using credit.
“Premium finance is specifically designed for insurance buyers to conveniently spread the cost of insurance policies. When compared to other forms of credit such as credit cards or overdrafts it is very cost-competitive and helps customers manage their money,” Adam concluded.
