Posts Tagged ‘car insurance quotes’

Comparing ca insurance quotes are essential for the consumer trying to find the best car insurance policy! Of this there is no doubt – but is it possible for the average consumer to “fully” compare these quotes?

At first glance we might easily say that –Yes – that is why we have insurance aggregators and comparison websites! I believe that with all the different car insurance offerings it is near to impossible to effectively compare any quotes other than the most simple or “stripped down” car insurance quotes.

Example of car insurance quotes

I would like to argue this with reference to an actual example sent to me by a car insurance client in Cape Town. She is a 37 Year old single lady and provided the following details:

• The vehicle to be insured is a Volkswagen Polo 1.6 Comfortline, 2004 model
• The vehicle was comprehensively insured at market value R72,700
• She paid the monthly premium of R534 through a broker at a car insurance company
• Additional benefits include roadside assistance + general liability of R500k + insurance of the radio @ R1,500 + excess buster
• After negotiations this was lowered to R455 with a Zero excess
• She approached a direct insurer and was quoted a monthly premium of R284
• Additional details include a joining fee of R205, the premium is fixed for 3 years and the general liability is for R5m
• The excess will now be a flat rate of R2500 and there is also a small dent policy

What does this say about comparing car insurance quotes?

I believe that comparing requires far more than merely comparing premiums. Even though car insurers are innovative in their insurance offerings and product design – they are also making it nearly impossible for clients to compare the offerings from one provider with that of another!

Extras / Sweeteners / Add-on’s / Additional Benefits – what to make of this?

It is these innovative additional benefits that make a comparison so difficult! The car insurance industry is highly competitive and the car insurers are constantly trying to find that one ingredient that could give them the edge! They design new products and even patent these add-on’s to stop others from doing the same.
Additional benefits include:

• No claims bonuses
• Premiums fixed for 2 or 3 years
• Roadside assistance
• Flat or no excess
• Etc

These benefits do not have an easily identifiable monetary value – thereby making it very difficult to estimate the true value of the benefit when comparing one quote with another!

Are car insurers intentionally making it difficult to compare their insurance quotes?

Product innovations and sweeteners are not unique to car insurance policies. In the pension fund industry we find the same variety in life cover with additional benefits such as varying free medical limits, funeral benefits, health and gym benefits and even educational benefits for remaining children.

We cannot expect from car insurers to merely provide the exact same benefits than all the other car insurers. This will not be in the interest of the consumer and could be regarded as anti –competitive. In the same way that fast food restaurant spice-up their beef burger with a special sauce or free drink, car insurers providers can be expected to out-wit competitors with unique product offerings!

Advice to the car insurance consumer

What can the consumer do to avoid all the clutter?

• The consumer needs to be aware that there are many different products and that they differ in more than just price.
• The consumer should approach any comparison with caution and take some time to compare offerings.
• Do your homework to gain an understanding of the true value of additional benefits.
• Only through some research and investigation will you be able to make an “informed” decision.
• Use the internet and ask around to gain the necessary confirmations – chat to happy and disgruntled customers to find the correct questions you will need to ask!

At the start of 2010 we raised the question “Would 2010 be the year for car insurance in South Africa?” We focused on the low percentage of insured cars in South Africa, the crime statistics and the need to have more car insured on our roads.

We expect that there is huge opportunity for growth in the Car Insurance market – and recent data revealed on financial websites such as ITWeb and Moneyweb supports this argument.

What is needed for an increase in Car insurance sales online?

I believe that an increase in car insurance purchases requires:

• Greater internet access
• Enhanced consumer participation
• Increased product offering
• Online and other marketing of these products

I believe it is necessary to discuss this – and especially the 2 top requirements in more detail.

Greater Internet Access

To do business online – you need to be online!
World Wide Worx recently said the number of South Africans with access to the Internet had grown 15%, to 5.3 million users, in 2009, and it expects a similar growth rate for 2010. Almost 11 million South Africans are expected to be online by 2015.

Wireless broadband has leapfrogged ADSL, growing almost three times as fast as fixed-line broadband, said World Wide Worx MD Arthur Goldstuck at a media briefing in Sandton.

“The good news is that we will continue to see strong growth in 2010, and we should reach the six million mark by the end of the year,” said Goldstuck.

Enhanced Consumer Participation

Being online does not mean that you purchase online. With Consumer Participation we would like to refer to whether those who are online are comfortable with making online purchases. These consumers might have been hesitant at first with the technology or might have had security concerns, but are now comfortable in making purchases via the internet…

This online shopping is expected to gather momentum as more South Africans log onto the Internet. A survey released by global credit card company MasterCard shows 77% of South Africans, who have Internet access, shop online.

Anthony West, MasterCard senior VP and GM of Africa, was quoted on ITWeb as saying that the trend towards online shopping is growing. Although this year’s figure is slightly down on last year, the company recorded growth in 2009, compared with 2008.

West said there have been concerns over security, a perception that users need a credit card to shop online, and consumers wanting to “touch and feel” what they buy. However, he says, there is a growing trend towards buying big ticket items, such as furniture, online.

MasterCard expects online shoppers to grow in line with the expected growth of Internet users.

Why do more consumers shop online?

MasterCard believes that consumers are attracted by the minimum hassle of shopping online when compared to the queues at normal shops, as well as the lower prices that can be found on the Web.
Interesting data from this survey includes:

• 83% of South African online shoppers are satisfied with their overall online shopping experience.
• 72% of active online shoppers intend to make an online purchase in the next six months.
• As online shoppers become more savvy and are increasingly satisfied with their online shopping experience, they are purchasing not just lifestyle items, such as airline tickets, online games and music downloads, but also basic necessities, including home appliances and groceries.

Conclusion

These are only a few of the indicators that could lead to an increase in Car Insurance purchases. “A sustained growth in internet penetration is a key factor that will positively influence the economy of South Africa”, Reshaad Sha, senior manager for Cisco Internet Business Solutions Group was quoted as saying in a statement.

We believe that the greater internet access available to South Africans and the better and more comfortable consumer experience by users will have a positive impact on the car insurance industry!!