What is Insurance Premium Finance?
Insurance premium finance (IPF) is a short-term credit facility that allows you to spread the cost of your annual boat insurance premium across monthly instalments. Instead of paying the full premium upfront when your policy renews, a finance provider pays your insurer the lump sum, and you repay the finance provider over the following 10–12 months with a modest interest charge.
IPF is not the same as asset finance. It does not give you ownership of anything, is not secured on your vessel and does not involve HP or a marine mortgage. It is simply a cash-flow tool that makes a large annual expense more manageable.
How IPF Works in Practice
- 1Your boat insurance premium is confirmed by your insurer - for example, £4,200 for the year
- 2You apply for IPF through your broker, insurer or a standalone IPF provider
- 3The IPF provider runs a brief credit check and, if approved, pays your insurer the full £4,200
- 4You repay the IPF provider - typically over 10 months - by direct debit: 10 × £441 at 8% APR = £4,410
- 5At renewal, you repeat the process or pay the new premium outright
The process is typically fast (same day in many cases) and requires minimal documentation. It is available to both private individuals and businesses.
Typical APR and Cost
| Premium Amount | APR | Monthly Payment (10 months) | Total Interest |
|---|---|---|---|
| £1,500 | 10% | £157.50 | £75 |
| £3,000 | 9% | £312.75 | £127.50 |
| £5,000 | 8.5% | £520.83 | £208.33 |
| £10,000 | 8% | £1,033.33 | £333.33 |
| £20,000 | 7.5% | £2,041.67 | £416.67 |
Indicative rates. Actual APR depends on provider, premium amount and applicant credit profile. Rates as at October 2026.
Main UK Providers
| Provider | Typical APR Range | Notes |
|---|---|---|
| Premium Credit | 8–12% | Largest UK IPF provider; used by many marine brokers; quick online application |
| Close Premium Finance | 8.5–13% | Part of Close Brothers Group; strong marine sector relationships |
| AFIG (Premium Finance) | 9–14% | Specialist in commercial and high-value premiums |
| Insurer own-brand schemes | Varies | Some marine insurers (e.g. Haven Knox-Johnston) offer their own monthly payment schemes |
IPF and Hull Insurance: What Lenders Need to Know
If you have a marine HP or marine mortgage on your vessel, your finance provider will almost certainly require you to maintain hull and third-party liability insurance as a condition of the agreement. They may require to be noted on the policy as an interested party.
Using IPF to spread your insurance premium does not affect your insurance cover or your obligations to your asset finance lender - you are still insured from day one of the policy. The IPF arrangement is simply a payment method and does not alter the insurance contract.
Where lenders may have concerns is if an IPF default leads to the insurer cancelling the policy mid-term for non-payment. This would leave the vessel uninsured, which would constitute a breach of the asset finance agreement. To avoid this, ensure your IPF direct debits are reliably funded and set up correctly at outset.
Is IPF Right for You?
Insurance premium finance makes sense when:
- Your annual premium is large enough to make monthly spreading worthwhile (typically £1,000+)
- You prefer to preserve cash flow for other purposes (refit costs, fuel, marina fees)
- The interest cost of IPF is lower than the opportunity cost of paying the premium upfront
- You are a business and can treat the IPF interest as a deductible finance cost
It is less suitable if your premium is small (the fixed administration cost of IPF makes it uneconomical below around £500) or if you have the cash available and no better use for it.