"Premium finance is specifically designed for insurance buyers to help make important insurance policies affordable."
Broken down by type, 44% are using credit to pay for their home insurance, 31% for life insurance, and 12% for critical illness cover.
Around a third (29%) of adults questioned believe their household income will fall over the next 12 months, and 41% of those who use credit to pay for cover say premiums have risen since the coronavirus crisis started.
Around three out of four (73%) of customers who have seen premiums rise said they have shopped around more to find cheaper cover, but 13% say they changed items or got rid of them to help reduce the cost of cover. Some 12% of people increased their claims excess, and the same percentage reduced their level of cover.
As a result of not being able to afford their insurance, some customers have had to cancel polices – around 4% of those who use credit to fund insurance have cancelled buildings insurance while 3% have cancelled contents cover.
Credit cards are the most popular form of borrowing with 36% using them compared with 23% who rely on finance offered by their insurer and/or premium finance. Nearly one in 10 (9%) use personal loans and 6% have borrowed from friends or family.
Adam Morghem, strategy director at Premium Credit, said: “Premium finance is specifically designed for insurance buyers to help make important insurance policies affordable. Looking to spread the cost of an annual policy into more manageable monthly payments works for many consumers and businesses.”
Owen Thomas, chief sales officer at Premium Credit, added: “Premium finance has become a very cost-competitive means for consumers to buy insurance and better manage their finances through spreading payments. At a time when household finances are under pressure it can be a good alternative to other forms of credit.”