How you pay for your insurance policies could be about to change. In the past, you gave your details to your insurance provider or broker, and they set you a price. While you might be able to pay the amount over several instalments, you are still essentially at the will of the insurance provider as to how much your overall yearly premium will be. Customers are often charged more and more each year. As a result, there is no incentive to remain loyal to a particular insurer. In order to challenge this, Aviva is offering a new model. The rise of Subscription Insurance could change how insurance works forever.

Subscription Insurance

Subscription Insurance is a new way of charging for insurance policies. AvivaPlus is going to provide car and home insurance policies. You pay for Aviva’s new service on a monthly basis. This works in much the same way as you might pay for Netflix or another streaming service. The price you pay will still depend on details about your personal circumstances, however.

AvivaPlus has three main selling points. Firstly, it promises to have no interest payable on monthly subscriptions. It also has no cancellation fee. This means you can cancel at any time without being charged for it. Finally, to counter traditional insurance’s problem with loyalty, Subscription Insurance from Aviva promises to cost the same or less than a new subscriber when you renew your subscription each year.

Mainstream Insurance

Despite the listed advantages, there are still reasons why subscription insurance is not yet ready to become insurance’s mainstream model. There is no guarantee that an AvivaPlus policy would be cheaper than a regular insurance policy. For some people, therefore, there is no real advantage to a subscription insurance policy.

In the coming years, it is likely that traditional means of paying for insurance will stay the default. Paying for your insurance via a subscription may become the future – however, until it becomes the cheapest option, it is unlikely to be everyone’s first choice.

 

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