Monthly Car Insurance

In the past we have all grown used to the idea that a car insurance policy lasts for a year, at an absolute minimum. We have tended to accept this without question but there has never been any reason why this should be so; it is simply a fact that no insurance company thought that there was a worthwhile market for a shorter term product and indeed the costs of setting up a policy for less than 12 months used to be pretty much the same as setting one up for a full year. All this has changed with the coming of, first of all, computerisation and then the rapid spread of Internet access which has made it possible for insurance policies to be put together, not by a highly paid insurance broker working with an actuary, but by a computer program! The very substantial cost savings that this has achieved has made it possible for temporary policies to be designed and marketed, including the type which is the subject of this article; month by month rolling cover.



The idea behind this type of policy is that you fill in a proposal form and you are presented with a quotation for insurance, either fully comprehensive or third party only, on a month by month basis. If you accept the policy you pay the first month's premium and then the payments for subsequent months are automatically deducted from your account for up to a maximum of eight months. The monthly cost of the policy is fixed at the outset, and you have the option of cancelling at any time, subject to a minimum of two weeks notice.

Advantages

Within a minimum of one month and a maximum of eight months cover you can allow the policy to run for as long as you wish which makes it very interesting to someone who simply doesn't know how long he or she will need it for. Even those who require cover for a fixed length of time, say two months or four months, will appreciate the fact that the policy is so flexible because, let's face it, things can go wrong and things can change so our plans do not always work out perfectly in real life.

Disadvantages

It is important to remember to cancel the policy, which can be done online, in good time when you come to the end of your requirement for it. You need to give two weeks notice before the payment is made at the end or beginning of the month and if you missed the deadline you would be charged for another month's use for which you would have no redress. Furthermore, the cost of the cover is more expensive on a month by month basis when compared with the average yearly insurance policy, and indeed if it was kept beyond just a few months the total cost could exceed the price that would have been charged for an annual premium, particularly when special offers or discounts on the latter have been taken into consideration.

To conclude then; month by month car insurance is another of those specialised products which may be ideal for the purpose for which it is intended. It is not, and never has been, designed to replace conventional long term policies.

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