Pay by the month insurance for tradies

One of the easiest and most common was to pay for your trade insurance is by the month.

A growing number of tradesmen are choosing to pay their policies monthly, which is in part thanks to the current economic conditions we are experiencing.

Why Pay Monthly?

Whilst insurance for the average tradie won’t be hugely expensive, it is a major cost that can vary anywhere from $200 for some basic tool cover through to thousands for a comprehensive insurance package.

Coming up with a lump sum amount upfront can place some stress on the cashflow, and the most common way of easing this problem is to spread the cost of the insurance across the year.

By paying monthly you can free up more cash to put towards tools and equipment, or even marketing.

How Does It Work?

In most cases monthly business insurance policies are setup using a method known as ‘premium funding’.

The reason why premium funding is used is because many insurers do not provide a monthly payment option on their business insurance policies.

To get around this, premium funding works by having a ‘funder’ pay the full annual premium on your behalf, which you then repay over a period of up to twelve months.

You can find out more about the benefits of premium funding by clicking here to read the information put together by one of the major providers of premium financing in Australia, Macquarie Bank.

Does It Cost More?

Paying your insurance premiums monthly via premium funding will cost more over the course of the year.

The premium funding company will charge you a fixed interest rate for the year, which will generally be somewhere between 10% and 20% depending on the size of your insurance premium.

Although this may sound high compared to a home loan rate, it is generally lower than what you’d be paying on a business credit card if you were to pay your trade insurance premiums that way.

Monthly Insurance Quote

When you request a quote on your insurance from your broker or direct from the insurance company, simply ask them to include a monthly quote.

When requesting a quote via the Tradesman Insurance website we will always ensure that the broker or adviser includes both annual and monthly figures to allow you to compare and make an informed choice.

If you are using a different broker and they are unable or unwilling to provide you with a monthly quote, it may be time to find a new insurance broker. Why not get in contact with us to see if we can help you?

 

Click here to compare premiums and save