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Direct debit for home insurance leads to a loan?

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  • 28-06-2011 5:13pm
    #1
    KazDub
    Registered Users Posts: 334 ✭✭


    Hi,
    our house insurance was up recently and I found a broker who could offer us the best offer to renew it. She took the first €104 there and then from my credit card via a phone call and said she'd send out the direct debit forms to me. Now, any time previously that I've filled out DD forms it's just the usual bank account details and sign the agreement. However, this time I have to sign up to a loan with a credit company and with an 8.4% interest.
    Is this now the norm? The insurance company is a major player. I was with them last year, but through another broker, and paid DD directly with no loan or interest involved. Is there a way of circumventing having to take out this loan agreement? This just seems ridiculous and will result in us paying more for our already ridiculously expensive house insurance.
    We will pay the full amout up front if needs be, in order to avoid this unnecessary charge, but I'm just annoyed at the manner in which this is going.
    Does anyone know if we are legally obliged to go through the credit company or can I insist that the broker takes the DD directly from our account and not through a 3rd party?


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    #2
    peteb2
    Registered Users Posts: 1,813 ✭✭✭peteb2


    No. You can't insist that they use an insurance company. In fact a number of insurers don't offer a direct debit facility. And when they do, they aren't agreeing to let you just pay on a month to month basis.

    Direct debits with an insurance company also involves a service charge for a similar amount.

    Some people seem to think that taking direct debits with an insurance company means that you are paying month to month and can just stop when you don't want insurance. Its an instalment plan to facilitate payment of a 12 month premium over a 10 month period genereally.

    And if you stop paying a direct debit with the insurance company they will cancel your policy due to non payment and you will have to declare it to your next insurer.


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