The last time I checked,
there were over 800 websites advertising 'no deposit car insurance'
listed in Google. Not bad for a product which, strictly speaking
doesn't exist (but don't panic, so can still get insurance even if
you're pockets have that empty feeling). An insurance policy is a
contract, and a contract has to work both ways. There has to be an
advantage to you; in that you get the insurance cover; but there
also has to be an advantage to the insurance company; in that they
have to get at least a deposit. Unless this happens, the insurance
policy is not enforceable; any insurance company that got involved
in a stunt like this would be put out of business by the Financial
Services Authority in double quick time.
A possible drawback to
paying for your insurance in this way is that you may be charged
extra for it by the insurers, which is reasonable because you are in
effect taking out a loan from them in order to pay your premium.
However, car insurance is a highly competitive business and there
are often very attractive offers available, and sometimes particular
insurers are happy to waive the extras in order to get your
business, and as a new client you may be eligible for a substantial
discount too; insurers are well aware that once they have you as a
client you are much more likely to renew your policy (at the normal,
not reduced, premium!) next year.
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