New Coverpay offers BNPL service for insurance premiums
‘Get cover, pay later’ is the slogan of the new Buy Now Pay Later provider Coverpay. It is the latest in a string of newly launched BNPL service providers that promise Australians access to services, without having to pay the full amount, upfront.
The difference with this latest BNPL offering is that it focuses on insurance. That’s right, Coverpay promises to give customers access to insurance without having to pay the full premium straightaway. Instead, those who do opt for Coverpay will pay the premium in 12, fortnightly instalments. Here’s how it will work.
- Step 1: Check whether the insurance provider you are signing up to offers Coverpay as an option.
- Step 2: If it is an option, Coverpay says you should be able to then select it and sign up in less than two minutes.
- Step 3: Finally, you will have to pay the insurance premium in 12 fortnightly instalments (that is every two weeks). So that’s about 24 weeks and six months.
It seems simple enough, but of course there are always fees to watch out for.
Does Coverpay charge fees?
Yes, Coverpay does charge fees. A $7 plan management fee will apply for each instalment. That’s about $84 all up. It sounds like a lot, but one thing to remember is that the idea of payment plans is not new and even if paid directly to the source (in this case the insurance provider) - they do often incur an admin fee.
Another fee to watch out for is the $40 default fee. Coverpay will charge this if you are more than three days late making a payment. Although the good news is that similar to other BNPL services, Coverpay does not charge interest on outstanding balances.
Does Coverpay have payment plan limits?
As with most BNPL providers, Coverpay does have payment plan limits. The maximum limit for an individual payment plan with Coverpay is $2,500. This means that you might not be able to use the service for insurance premiums over $2,500.
The total limit for all payment plans on the Coverpay platform is $10,000. That means all bills you are paying through Coverpay cannot exceed $10,000, at any given time.
There may be other conditions that apply as to who exactly is eligible for Coverpay, so be sure to read all the fine print. Or, head to Mozo’s Buy Now Pay Later hub for more general information on how services like this work.
What alternatives are there to Coverpay?
Alternatively, if you’re not too keen on signing up to a Buy Now Pay Later service - you could consider insurance providers that accept monthly payments. Insurance companies do often charge a bit more to pay a premium monthly rather than annually, but it might be worth weighing this extra cost against the plan management fee charge with Coverpay.
You may even find that paying for insurance in monthly instalments is less than paying by Coverpay. To see what the costs might be like, head to either Mozo’s compare home insurance page or compare car insurance page to click through to providers and gather quotes.