Customers of the insurance giant will no longer have to face choosing between annual payment or monthly payments with the added cost of interest.
Aviva says the move is to tackle “consumer concerns” over the insurance industry and give customers more control.
Currently, nearly all insurance providers offer the opportunity to buy insurance annually or monthly, but often monthly payments come with added interest costs.
For many who are not able to afford annual payments, this locks them into paying higher overall premiums as monthly payments are more accessible in the short tem.
Many providers also offer enticing introductory 12-month premiums which are then hiked significantly at renewal.
Now, Aviva has launched what it is calling 'AvivaPlus', a subscription-style payment option that doesn't lump on extra interest costs. Customers will be able to pay for home or car insurance this way.
The firm says it will guarantee the renewal price will not be higher than for a new customer. However, at time of renewal your quote may change dependent on claims, inflation and tax changes.
There will be no interest to pay on monthly amounts, and customers who opt for multiple products will receive a 20% discount. There are no cancellation charges either.
Home and car insurance will come with three tiers of cover with different price points depending on customers' needs.
The firm says existing customers will be able to switch to AvivaPlus and that if they wish to do so they will have the cancellation fee for their existing policy waived.
The scheme is available now, but not everyone will be able to take advantage yet as Aviva says it is rolling it out in stages to new and existing customers.
Aviva’s UK Insurance chief executive, Andy Briggs, comments: “We recognise that consumers want the insurance industry to listen to them so we’ve worked with thousands of customers to understand how insurance could better meet their needs and provide the flexibility they want for their modern lives.
“AvivaPlus is a reinvention of insurance, which has been developed and tested with customers’ needs at the centre, and it’s now starting to roll out alongside our existing products. Like subscription services, it’s designed to make it easy for customers to change their cover as often as they want without incurring charges.
“Importantly, AvivaPlus addresses price disparity, regarded by an overwhelming majority (82%) of consumers as one of the most unfair practices of the insurance industry. With our renewal price guarantee, which ensures existing customers are offered the same or an even better price than an equivalent new customer, we’re creating a level playing field for new and existing customers.”