Insurers have promised to clean up their act after coming under fire over the “poverty premium”, whereby customers who cannot afford to pay for car insurance in one go are charged punitive interest to spread the cost.
The Association of British Insurers (ABI) said its members had agreed to an action plan aimed at managing the cost of paying monthly for motor insurance. The pledges include companies giving customers clear cost comparisons between the two payment options and publishing the average finance charge.
