Understanding Insurance Cashback

Potentially, any risk that can be quantified can be insured. This is the basic premise of Insurance, placing a financial value upon any risk and calculating what the cost would be to alleviate any damage. Anything that has a significant value to an individual can be insured but this can prove costly, especially given the number of things we tend to need insurance for. In some cases, a particular insurance plan may cover a number of categories, for example, car insurance would typically cover both property risk – covering the risk of fire, theft or damage to the vehicle – and liability risk – covering any legal claims towards the cause of the accident.

Insurers tend to make their money in two different ways: the first is through underwriting which is where the insurers assess the risks to insure and calculate how much to charge in premiums for accepting those risks. The second way is by investing the premiums they collect from the insured.

Wading through the insurance market
The types of insurance available, the qualifying elements and the definitions of what they cover are too many to list here, but it’s no wonder that customers frequently look towards the internet for help in finding the plan most suited to their own requirements. Price comparison sites are useful for searching the internet for the best tailored packages but whilst they may offer support in introducing the customer to the insurer, they aren’t necessarily going to help them save money.

Insurance and cashback sites
In order to find the best deals available, it is always best to know as much information about what you’re looking for – especially before speaking to any of the insurance companies directly as you can be sure they may try to entice you to sign up with extra features on an insurance plan that you simply don’t need. Some special deals are often excluded from comparison sites as well, so for those really looking to get the best offers, then a cashback website could really help.

An important fact to remember for any customer is that you can almost always find the product cheaper online. The rise in internet use has added pressure on all retailers to come up with competitive details to attract new customers and to reward loyal ones. With customers able to search for their product from a world-wide source, it comes as no surprise that competition for almost everything is going to be high. But retailers can benefit too: the internet exposes their business to a much wider audience, and the costs of advertising on-line tend to be much lower.

A cashback website will advertise a variety of insurance brokers, and take commission from them every time a new customer signs up to one of their policies. Unlike comparison websites however, the cashback sites return a large amount of this commission back to the customer, storing this credit until the member either reaches a certain threshold usually after building up their cashback credit from a number of other purchases, or until they reach a certain period of time – many cashback sites will work to a quarterly turnover so may hold onto the cashback credit until a certain date. The cashback can be made via a BACS transfer, a cheque sent, points redeemed onto a credit card balance, or sometimes even gift vouchers issued.

Doing your homework
With insurance deals to cover anything from homes, vehicles, pets, dental treatment, health, travel, life and pensions – one retailer even offers a policy to cover weddings, confirming that for anything that may prove costly but has foreseeable risks, can be covered. But, with different brokers offering a range of incentives for new customers, working out the best value-for-money and tailored plan can need a little bit of research.

A search through Cashback Club on three different retailers found the following results for travel insurance. The premise was for a single trip to Europe, for one person at the age of 35, from August 1st 2008, to August 15th 2008.
One insurer quoted £17.78 for the insurance, but for those customers applying through the cashback Club website, a cashback of 7.5% was also offered. The price after cashback would therefore be £16.47.

Another broker quoted £20.90 with a 5% online discount and with £4 cash back for a single trip. The total cost after cash back would be around £15.80.

The final search was from a smaller insurance company but y far had the most competitive deal. The same trip would cost just £10.00 to insure and when purchased through the Cashback Club website, offers cashback of 7.5%, so the customer would effectively be paying just £9.25.

All of the retailers offered similar packages in what they cover, but differed in the time periods for claims and the available added extras. These are just examples however, of the types of savings available online and the benefits of making the purchase through a cashback website.

As similar search carried out on home insurance deals saw similar discounts available, though it was noted how competitive an industry this must be as the incentives differed significantly. One large bank offered combined contents and buildings insurance with a range of incentives including 1/3 off for new customers, a 15% first-year discount, and customers purchasing through the Cashback website could claim £45.00 back. Because the rates of re-payment vary depending on the insurance cover, then assessing value-for money becomes tricky; though all of the websites had clear definitions and there would be nothing to stop a customer from enquiring in person to assess insurance details, but then waiting until they get home to make the claim through a cashback site and claim that cash back reward.

Reading the small print
As with any contracts, remember that it always important to read the small print before signing up. A good insurance policy should always have a cooling off period which allows the customer to opt out within a certain period of time. It is also important to remember that the site that offers the most cash back might not necessarily offer the best all round deal, and with so many retailers competing for customers, the numbers can at first seem confusing. But Cashback Club is a great place to start and the rewards are certainly worthwhile.

Filed under: Cashback Guides