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The term no deposit insurance seems to be more applicable in the UK than in the United States. Apparently regular insurance operate on the antiquated notion that insurance deals are contracts, and as contracts, require a cash transaction. No deposit insurance appears to be a relatively recent thing that has become increasingly popular and competitive of late as insurance providers jostle with one another for market share.

In many ways, no deposit car insurance is a better policy line for most people, at least in places where such matters are applicable. With the introduction of credit and debit cards, insurance rates can be more easily paid, and no deposit policies are being offered by a larger number of insurance companies. Payments for no deposit insurance are usually spread over a twelve month period, rather than one or two lump sums at the beginning of each insurance cycle; you can cancel your policy at any time during the year. It is sometimes also known as pay as you go insurance.

No deposit insurance mirrors short term insurance in various ways. You can get more specific coverage only for when you think you need it. You don't have to pay an upfront fee. And you can cancel or renew according to your needs.

The advantage no deposit insurance has over short term insurance is that it can make high insurance standards affordable. Short term insurance becomes economically less advantageous the longer you purchase it. Consider no deposit insurance as a suitable alternative to short term insurance.

Students or those who have difficulty making ends meet particularly prefer no deposit insurance. Paying the lump sum an insurance company charges upfront can be difficult for low income drivers. Premiums will not be higher, and you can pay on a monthly basis.

Insurance companies still evaluate your overall premiums based on 12 month periods. Also, interest will accrue on the total value of your policy, somewhere around 20 percent APR. Many of the same factors still apply in determining the premium, such as the amount of liability coverage you are trying to purchase, or your driving record.

You can find a number of no deposit insurance quotes online for free. Be sure to check around and find a reputable insurance company before making a decision. Cheap bad coverage is worse than slightly more costly but good coverage.

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