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Saving Money

Some insurance brokers charge extra for monthly payments, and some don’t.

Are the ones not charging extra automatically better?

Are the ones charging extra just greedy?

Interesting questions, and definitely worth looking at when you’re comparing trade insurance quotes.

Before we get started, yes it does cost extra to pay monthly with Trade Risk.  There are important reasons for this, which we’ll cover below.

Why do some brokers charge extra for monthly payment?

There’s a very simple answer to this – cash flow.

Put it this way:

If you did work for a customer today, and they wanted to pay you in twelve monthly instalments, with no interest, would you accept?

Of course you wouldn’t!

It would kill your cash flow.

As insurance brokers we predominantly get paid via commissions.  When you take out a policy and pay annually, we get paid a commission shortly afterwards to cover our work.

In theory we could allow you to pay monthly at no extra cost, but then the insurance companies would drip-feed our commission in line with your payments.

Say the commission on your policy was $100.  If you paid annually, we’d receive the $100 shortly afterwards.

Like any business, we need this money to pay our staff, our rent and all of the other expenses involved in running a business.

If we allowed you to pay monthly, the insurance company would split our $100 commission over your 12 monthly payments.

This would mean the work we did today would not be fully paid for up to a year.

If we went down this path, we simply wouldn’t have the cash flow to support the high level service that we offer to our clients.

But some brokers are offering monthly at no extra cost!

It’s true, there are some brokers offering monthly payments at no extra cost.

This is typically at the smaller end of the spectrum in terms of premiums, which is where the majority of tradies sit.

So how can they offer this?

Well it’s unlikely they are doing it just to be nice to you!

They may be willing to take a hit on cash flow in order to win more new clients.  There’s nothing wrong with that, but it may mean they have to cut corners on service levels.

The other common situation is that they simply charge higher premiums overall to make up for the shortfall.

That’s why it’s so important to look at the overall cost of the insurance when going monthly.

Another broker may be offering monthly payments at no extra cost, but if the overall cost is still lower with Trade Risk, why wouldn’t you go with us?

We don’t pocket the extra!

So if you do choose to go with Trade Risk and pay a little extra to go monthly, does this mean Trade Risk pockets the extra cash?

Absolutely not.

The monthly payments are arranged via a facility known as premium funding.

A premium funding company agrees to pay the insurer the full premium upfront (which means we get paid upfront too) and you then repay the funder over twelve monthly repayments.

It’s a great system which allows our clients to pay monthly, and us to manage our cash flow without cutting corners on service quality.

Whilst we don’t pocket the full extra, we do get paid a small commission by the premium funding company.

It does take us a little more time to process a monthly payment contract compared with an annual payment, and this little extra commission covers the extra work.

It’s your choice

Ultimately it’s up to you whether you want to pay a little extra each month to use Trade Risk.

We don’t put ourselves out there as the cheapest budget cover for tradies.  Instead we put ourselves out there as the trade insurance experts providing industry leading service.

Aiming to be the best means not skimping on having great systems and staff, and that costs money.

Whilst we still aim to offer super competitive premiums, we can’t cut into our cash flow, and therefore we have to charge that little bit extra for monthly payments.

We hope you understand, and most importantly we hope you agree with thousands of other tradies who choose Trade Risk.

Tradies Love Trade Risk

In 2017 Trade Risk was awarded a Gold Trusted Service Award for the amazing service we offer to thousands of tradies from around Australia.

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    "Would recommend"
    Anthony Everett | Tradesman Insurance |
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    "Easy to deal with and very friendly staff."
    Goss Electrical Pty Ltd ATF Goss Electrical Trust | Tradesman Insurance |
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    "good service and price"
    John Patrick Griffith | Tradesman Insurance |
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    "Service was excellent and quick"
    Pietro Zampierollo | Tradesman Insurance |
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    "Trade Risk make liability insurance so very simple i would definitely recommend them and have done so to other tradies"
    Stephen John McMurtrie | Tradesman Insurance | Lutwyche
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    "Quick and easy renewal of my insurance for a good price, I couldn't ask for more."
    | Tradesman Insurance |
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    "Great service. Efficient and timely."
    Black Ship Investments Pty Ltd As The Trustee For Alarcon Hernandez Trust | Tradesman Insurance |
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    "Good price always respond quickly"
    Renae Ann Bradshaw | Tradesman Insurance |
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    "Excellent value for money."
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    "excellent, streamlined,"
    Greer Atkinson Trading As Oui Moet | Tradesman Insurance |
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    "Good communication and an easy transaction to get the cover I needed"
    Kean As Electrical Pty Ltd | Tradesman Insurance |
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    "Best service from Jennifer Steger my account manager. Jennifer sourced me a better deal that suited my business and was cheaper. Would recommend to others and would buy again"
    | Tradesman Insurance |
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    "Haven't had to make a claim but everything else seems easy and straight forward. Cheapest price I could find too, hope that's a good thing??"
    Marius Ionut Nitu T/As Marius Nitu | Tradesman Insurance |
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    "No complaints, quick response happy as"
    | Tradesman Insurance |
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    "extremely quick service very fast response to questions asked really great a pleasure to do business with"
    Joseph Ripolles | Tradesman Insurance | Alpine
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    "Always so easy to deal with."
    Scott Anthony Bowden | Tradesman Insurance |
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    "As always, hassle free and easy to deal with. I recommend them to anyone looking for business insurance."
    | Tradesman Insurance |
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    "Was extremely happy with the service very easy and very convenient"
    Probrush Painting Pty Ltd | Tradesman Insurance |
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