Royal & SunAlliance (R&SA) is scrapping its instalment facility in the Irish Republic, which allows premiums to be paid over 12 months.
Householders and motorists seeking cover after November 1 must pay all premiums upfront, though customers renewing existing policies will not be affected.
Other major insurers, including AXA, Allianz and Quinn Direct, say they will not follow suit.
An R&SA spokesman said the policy change was prompted by concern over customers who stop instalment payments shortly after being put on cover. While insurers are entitled to cancel cover in such circumstances, the procedure can be cumbersome because instalment agreements are protected by Irish consumer legislation.
Irish Insurance Federation (IIF) chief executive Mike Kemp said: "When people get motor cover, they also get the insurance certificate and disk. If they stop paying the instalments, it can be difficult to get this documentation back."