Can I pay for my Greenslip monthly?
At Valuegreenslips.com.au we get asked the question, “Can I pay for my greenslip on a monthly basis?”on a frequent basis.
“At Value Greenslips, we would love to offer this facility to clients” says Phil Lemieux, Managing Director at Marillion Insurance Brokers. “As people always compare greenslip prices over the internet to secure a cheap, or the cheapest rate, providing an automated facility to allow customers to pay for their greenslips by the month would be ideal and assist customers in managing their cash flow a little better”.
“The issue we are faced with is a green slip is a non-cancellable insurance product, given that it is compulsory to buy one in order to register your car” Phil mentions. “As it is compulsory there are only limited circumstances by which insurers can request the vehicle’s registration be cancelled in the first instance and then the CTP policy cancelled thereafter. Non-payment of a valid greenslip is not a reason accepted by the RMS for cancellation purposes.”
As greenslips are a cash for cover product, meaning insurers require their full payment upon taking out insurance, intermediaries generally can seek out the support of premium funders who make their own capital available to customers for insurance payment purposes. Intermediaries can help facilitate the borrowing of funds for this purpose and therefore allow the policy premium to be paid over the life of the policy. Premium funders in the industry include Macquarie Pacific Funding, Attvest Finance, Hunter Premium Funding, Centre Point Premium Funding and others.
All premium funders are reluctant to allow the advance of funds against a policy that is non- cancellable such as CTP. If the monthly premiums are dishonoured, the premium funder cannot use the cancellation of the policy as a means to encourage the honouring of the dishonoured payment. In general insurance, should a customer not honour his policy payment obligation, the premium funder would simply request that the insurance policy be cancelled for non-payment, an option not available in Compulsory Third Party.
“Despite the premium funder’s stance on this, we continue to negotiate with premium funders for the purpose of making CTP more affordable and less of a burden on customers by spreading the payments of the insured period.” Phil mentions. “We hope to find a more suitable solution in due course for our customers and make this availableas the funding solutions improve in these markets. In the interim customers can always opt to pay for their policy on a 6 monthly basis.”