Posts Tagged ‘Cheaper car insurance’

Do women deserve cheaper car insurance premiums?

Written on November 27th, 2009 by admin
Categories: Cheaper car insurance
Are women better drivers?

Are women better drivers?

The debate between women and men drivers about driving skills is always an interesting and often heated one. We have recently added 2 blog posts on this topic titled “Why do some car insurers focus on women only?” and “Does cheaper car insurance imply women are better drivers?”.

On our social media platforms such as Facebook we find that our road safety experts differ on the driving ability of our male and female drivers. One of our accident investigators, who has witnessed many horrific accidents caused by both male and female drivers remain unconvinced that “women are the better drivers” – whilst one of our female road safety experts pointed towards the fact that car insurers have the facts to prove that women cause fewer accidents.

During this 16 Days of Activism for No Violence Against Women and Children, it is appropriate to write something with a focus on our female drivers. Even though this is not necessarily a tribute or a post aimed at applauding our female drivers, it shares some light on this debate – and might provide some information to be used in the often heated exchanges between men and women on this topic.

I have come across interesting data appearing in “Science Daily” under the title “Women Not Neccessarily Better Drivers Than Men”. This article made reference to a research study by the Johns Hopkins Schools of Medicine and Public Health. This study found that although men are three times more likely than women to be killed in car crashes, female drivers are involved in slightly more crashes than men measured on distance travelled. Overall, men were involved in 5.1 crashes per million miles driven compared to 5.7 crashes for women, despite the fact that on average they drove 74 percent more miles per year than did women.

The investigators, who published their results in the July 2008 issue of Epidemiology, found that although teenage boys started off badly, with about 20 percent more crashes per mile driven than teenage girls, males and females between ages 20 and 35 were equally at risk of being involved in a crash, and after age 35 female drivers were at greater risk of a crash than their male counterparts.

Lead author Guohua Li, MD, PhD, associate professor of Emergency Medicine at the Johns Hopkins School of Medicine, and of Health Policy and Management at the Johns Hopkins School of Public Health, said, “Although risk-taking behaviors may contribute to the excessive injury mortality among men and younger drivers, up to now age and sex discrepancies in death rates from motor vehicle crashes have not been well understood.”

Which factors were taken into consideration?

The researchers used 1990 crash statistics gathered by the Fatal Accident Reporting System (FARS), the General Estimates System (GES), and the Nationwide Personal Transportation Survey (NPTS) and applied an innovative method called “decomposition” to break down the data into new categories and weigh the relative contributions of three variables: crash fatality, incidence density (that is, number of crashes per million person-miles) and exposure prevalence (annual average miles driven per driver). Traditionally, the death rate ratio has been considered to be a function of just two factors: fatality rates and accident rates.

The investigators determined that about half of the 3.1-fold difference between the sexes’ fatal crash involvement rates was due to the fact that males’ crashes were more severe. Another 40 percent was due to the fact that men, who on average drove many more miles than women, thus had a greater opportunity of being in a crash; and 8 percent because of gender differences in “crash incidence density,” the number of crashes per million person-miles.
[Information from materials provided by Johns Hopkins School Of Public Health]

This will remain an interesting debate. There is no denying the fact that women are offered a lower insurance premium – and the lower insurance risk tells us that this is well deserved. Whether they remain in a more favourable financial position will however depend on their accident record and whether they manage to avoid accidents and car insurance claims!

We wish all our female drivers the very best – may they be safe from harm and the trauma of car accidents!

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Comparing car insurance by going online

Written on November 23rd, 2009 by admin
Categories: Car Insurance Advice, Cheaper car insurance

Comparing-car-insurance-by-going-onlineYoungsters today will struggle to understand how it was possible for their parents to do research and analysis without the internet. I remember how, as a student reading law in the late eighties and early nineties, I spent many hours in the library making notes and thousands of photocopies. We wrote down info from many resources, cross –referenced and double checked – a process similar to comparing car insurance quotes and prices!

How did we compare insurance quotes and rates before the internet?
Almost all financial decisions were made with the assistance of financial advisors. These financial advisors worked for specific financial companies or had “broker agreements” with financial service providers and insurers. Research, analysis and quote comparisons were performed by the broker and a solution offered to the client. Very little communication took place between the clients and insurers – apart from policy documentation and updates from the insurer; almost all communication was between the client and his broker and between the broker and the insurer.

How did the internet change the comparison of car insurance prices?
All this changed with the birth of the internet. The internet made it possible for the average Joe to do research with ease and gather information from sources previously unknown. Not only was it easier and faster to gather information and do quote comparisons, but many new insurers came to existence. The internet allowed insurance companies to be created with an “online business model”.

The consumer does not anymore need to call tens of companies from the telephone directory and spend hours in meetings talking to insurance companies and their agents! We have seen the fast rise of direct insurers and insurance aggregator and our older insurance businesses had to change their traditional business models to cater for the sharp increase in online insurance business.

How can we use the internet to compare insurance quotes?
We have stated earlier in this series on car insurance comparison that we would like to discuss the process of insurance comparison in a manner that is both practical and easy to understand. We would like to provide a summary of the comparison process and how it is to be done online:

Insurance research / Information gathering
To make an informed decision about car insurance we need to start by gathering information. Information to be gathered includes information about the essential elements of insurance, information about the various insurers / product providers, information about the specific products and prices, etc.

Where do we find this car insurance information?

  • Financial Industry Websites

We have previously written about the important aspect of asking questions. To ask questions to the insurers and third parties we need to have some understanding of the topic we are enquiring about! There is no purpose in asking about “excess payment” if you do not understand what an excess is.

Financial websites and websites from the insurance industry will provide information about insurance terminology and the various terms and conditions. They will also provide very important independent insights on the business models, financial sustainability and reputation of a variety of car insurance companies.

  • Insurance Company Websites

Someone remarked a few years ago that if businesses in future do not have websites, they will not have business. All the insurers nowadays have websites. These websites are even more important for the direct insurers who do business only online or through call centres.

The websites of insurance companies will give you information about the insurance company, their insurance offerings and the terms and conditions. Many of these companies have a frequently asked question section or FAQ’s. Information included in these websites will allow you to gain a better understanding on which aspects you need to address for further clarification.

  • Consumer Websites

In the post on car insurance and the need to ask questions we referred to the importance of asking friends, family and colleagues about their current and previous insurers. Clients are the best at providing an honest account of how they have been treated as policyholders by their insurers. Not only can the consumer experience be measured through conversations with clients, but also by going online and visiting consumer websites.

Consumer websites provide clients with the opportunity to share their positive and negative experiences and also allows insurers to respond to these complaints. Some insurers such as MiWay have taken the brave step in allowing clients to share both positive and negative experiences on the company website.

Car Insurance and Price Comparison
Once the vehicle owner has gathered all the necessary information about the insurance offerings and the insurers he needs to approach, it is time to request car insurance quotes and compare the rates and benefits. This could be done online through two methods, namely;

  • Car Insurance quotes from the insurance companies

The client can approach the insurance companies online and request an insurance quote. These are the insurers who will only provide their own quotes. We find nowadays that more than only the so-called “direct insurers” allow consumers to complete and submit quote requests online. More and more insurers who have traditionally operated through brokers have come to realise that consumers will use the online ease and functionality of quote request forms, if available!

  • Car Insurance quotes online via insurance aggregator websites

We have, in an earlier post discussed the increase in insurance business through insurance aggregators. Insurance aggregators have been described as “price comparison sites” – online portals with the specific objective of allowing comparison between the insurance quotes from various insurers. The Insurance Aggregator develops the “quotation portal/ search utility”, markets this medium and agrees with the participating insurers to be paid a referral fee for policy contracts concluded based on the client information provided to the insurers by the aggregator.

How does it work?
Consumers fill out a quote form and are offered a number of quotes from different insurers. Consumers can gain instant and easy access to quote and price comparison through insurance aggregators. The consumer can take these quotes and compare them, helping them to find good coverage at an affordable rate.

In South Africa the well known insurance aggregators are Hippo and Insurance Hound. The well-known financial website, Moneyweb, has also recently launched Moneywebmarket.com – an independent insurance provider comparison website.

Insurance aggregators are important tools in insurance comparison. They can provide important guidance on price differences. The consumer has to be alert however that not all insurers might be participating insurers and there is a need to question the independence of the specific aggregator.

Conclusion
The internet is providing an easy and effective method to compare insurance quotes. It also makes it very cost effective to monitor your portfolio and re-assess your needs and financial well-being! We can only expect that more and more car insurance business will be concluded via the internet!

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Compare car insurance quotes by asking questions

Written on November 18th, 2009 by admin
Categories: Car Insurance Advice, Cheaper car insurance

Compare-car-insurance-quotes-by-asking-questionsAdvice on how to compare car insurance quotes needs to be practical and to the point! In this part of the series of blog posts on comparing car insurance quotes we would like to focus on the need to ask questions!

As a student I was often advised that there is no such thing as a bad question. I however believe that I endured listening to a number of rather stupid questions – and might even have asked a few! Only later did I discover the truth in this statement – the fact that a question which appears stupid for one person, might offer significant value to others! It also allows the expert to become aware of important facts that are leaving ordinary people in the dark…

When do I ask about car insurance?

It is never too early to gather information! It is most important to ask questions about car insurance before you consider buying a vehicle. You should have made your decision before the date of purchase – it is simply too big a risk to drive uninsured! You do not need to wait till you become a vehicle owner – even if you don’t own a vehicle it will allow you to participate in discussions and make informed decisions later.

Who do I ask about car insurance quotes?

You will be amazed at all the sources of information you may find. People tend to be very willing to tell others about their bad insurance experiences. For some strange reason we often want to feel victimized and in need of others having to express their support and feeling sorry for us…Ask others your questions to avoid headaches later!

Consider who you ask and what you would like to know:

  • Friends / Family/ Colleagues

This group of people is close to us, talk on our “level of understanding” and are easy to approach. They would be willing to provide information on bad and good experiences. We can ask them about their car insurance companies and why they chose the specific companies. Why did they choose that company or move from a previous insurer? This should provide some insight to the reputation of car insurance companies. The best information is from those who experienced vehicle damage or loss, who have been there and have gone through the whole insurance and reparation experience!

They might be able to tell us what it was like for them to talk with a representative of the insurer, the ease of filing a claim, the time it took to complete the claims process and if they would recommend using that car insurer. They would also be able to tell you which aspects of car insurance they wish to have known before the claims experience! Look for patterns and similarities from several responses.

  • Financial advisors / brokers

Those who decide to use a financial advisor will be able to ask questions and benefit from the expertise and experience of these professionals. They do come at a cost, but would be able to share their experiences with a variety of car insurers and insurance claims from a number of clients. Insurers are not the same and there might be vastly different offerings. Try to gather as much information as possible about these offerings.

Even if you decide to avoid the middleman and save on commission payable to brokers – you might still have friends or family who are brokers and who are most willing to share insights and information. Even though you do not ask them to do the comparison of car insurance quotes for you – you could still ask them why they prefer specific insurers above others… [Keep in mind though that they might avoid the direct insurers as they do not receive commissions from these insurers and might have a contract with a specific short term insurer.]

  • People involved in the vehicle recovery and repair industry

You might know people who work in the motoring or vehicle recovery and repair industry. People who are around others who sell, recover or repair motor vehicles might be a useful source of information. They know how people struggle after their vehicles have been in accidents and are well aware of good and bad service delivery from insurance companies.

  • The consultants at insurers you have short-listed

Once you have identified a few providers, do not hold back your questions and speak to consultants from those insurers. Do so face-to-face or on the phone! By contacting the insurers you can get a better feel for how they treat their customers.

Many of these insurers also provide on their websites a section with “frequently asked questions about car insurers”. This is an important source of information – many other clients might have asked similar questions to those you would like to be answered. Ask the consultants where you can find such FAQ’S about car insurance!

What questions should I ask about car insurers and insurance?

Questions to be asked could include some of the following:

  • Who is covered under the policy? Is it you, your spouse and licensed children?
  • Does the policy limit the number of regular drivers?
  • Which parts are covered under the insurance? Does the insurance cover manufacturer approved parts?
  • What would the amount of the excess be?
  • Are there “car hire options” – would I be provided with a vehicle while my damaged vehicle is repaired?
  • Can I find information on rankings amongst insurers with regards to different departments within the company, such as billing, contacting the insurer, pricing, policy offerings, and the overall experience?
  • Which extra services are provided? Do they provide vehicle recovery and towing assistance?
  • Which fine print should I be aware of in the insurance contract?

These questions and answers should provide important awareness and allow you to make an informed decision on which companies and products to best meet your specific needs. Ask questions! – Even if it might appear to someone to be a stupid question – it will give you peace of mind and allow you to find the best car insurance!!

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How much does my home address affect my car insurance premium?

Written on November 13th, 2009 by admin
Categories: Car Insurance Advice, Cheaper car insurance

where I am drivingDriving from Bloemfontein to Johannesburg last evening alerted me to the significantly higher risks of road accidents in our bigger cities. Driving at 19h00 in Johannesburg is a totally different proposition to driving at the same time in Bloemfontein. There are simply many more vehicles on the road and the drivers appear to be more aggressive.

But how important is where I live when my car insurance premium is calculated? Location is not only important for car insurance premiums, but also for household and other short term insurance. Actuaries use historical claims data and crime statistics to calculate the perceived risk – and it is common sense that the insurance risks are much lower in rural areas or smaller towns!

But is this not discriminatory?

I have come across a very interesting article on the Detroit Free Press on this topic. It appears that a bill by state Sen. Martha Scott that would ban insurance companies from using territorial ratings to help set rates, was soundly defeated last week in the Republican-controlled Senate.

This is said to be a big disappointment for Scott and for many others who believe that insurance companies shouldn’t penalize drivers for where they live.

This bill was seen as an effort to control unaffordable urban insurance rates. Unaffordable insurance rates have become an urban crisis, driving people out of cities like Detroit and practically forcing more than half the drivers in some neighbourhoods to go without insurance, or in some cases commit fraud to secure coverage at more reasonable rates.

Interesting facts revealed in this article include:

  • Paying $4,000 a year for car insurance isn’t unusual in Detroit, the nation’s poorest big city.
  • Statewide, an alarming 17% of motorists drive uninsured, up from 11% in 1989.
  • Uninsured drivers put themselves at great risk and can even reduce what insured drivers collect in accidents.
  • Since Government in the US requires people to buy insurance, it is argued that it should also help control the costs.

We have on the Car insurance Blog addressed the topic of finding cheaper car insurance by focusing on the specific needs of the insured. We have also referred to the area where the vehicle owner is regularly driving in this discussion. It is important to be alert of the impact that location might have on your insurance and to communicate changes in risk profile to the insurer.

We often find that older vehicle owners move to smaller towns at the coast or rural areas when reaching retirement. They tend to drive less and their driving is in less congested traffic. But do they benefit from these reduced risks? No insurance company will automatically reduce car insurance premiums. The insurer will not be aware of a change in risk profile if such insurer is not alerted to the change!

It is clear that the area where you live is very important – not only to your emotional well-being, but also to your pocket. The money might be in the cities – but this might come at a cost as well! Perhaps the smaller towns or cities do have a few additional benefits!

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Why do some car insurers focus on women only?

Written on November 12th, 2009 by admin
Categories: Cheaper car insurance

women_drivers_insuranceThe debate of “women drivers vs men drivers” has been a popular debate at the workplace for many years! Men tend to share video clips of women drivers performing the strangest driving behaviour and ending up with their vehicles in ridiculous locations…Women answer by alerting their male colleagues to the fact that some insurance companies only provide car insurance cover for women as they are perceived a lesser risk!

On the car insurance blog we have added to this discussion in a blog post titled “Does cheaper car insurance imply women are better drivers?” It is interesting to note that cheaper car insurance for women drivers is not a uniquely South African phenomenon – it is an international trend!

I have come across rather interesting data from the UK. A rather comprehensive research study based on analysis of over six million quotes between June 2008 and June 2009, has revealed the following:

  • The latest car insurance research suggests men, on average, pay more than women for their annual premiums.
  • Twenty-something males shell out 112 per cent more for car insurance than their thirty-something counterparts.
  • According to data compiled by Money Supermarket, men pay an average of 71 per cent more than women on car insurance.
  • Money Supermarket’s researchers found men in their twenties pay an annual average of £1004 on car insurance, compared to around £473 for those in their thirties.

Insurance companies employ the services of highly qualified actuaries to calculate insurance risks presented by all insured clients. They use historical data and are able to adjust premiums as the insurance environment evolves and the risks change. Many new insurers provide specialized services focused on specific areas. We find insurers catering specifically for trucks, 4×4’s, motorbikes and even for a specific gender –women!

Data on car insurance claims has revealed that there is a lesser risk of insurance claims from women drivers. Women are seen as “safer and more mature motorists”. The car insurance premiums for women are both cheaper and decrease with age at a faster rate than men’s.

Younger male drivers have to pay more for expensive motor insurance as they are perceived as a high-risk category. These younger vehicle owners would have to focus on other positives to find cheaper car insurance. These would include:

  • A good driving record / Few or no accidents!
  • The vehicle that you drive – an average, yet safe model that is not too expensive to replace or repair.
  • The ability to shop around and use the internet to compare and find affordable deals.
  • The specific needs of the vehicle owner – distance travelled, risk area to be travelled etc.

It is important to respect this gender bias by insurance companies. This is purely a business decision and not gender discrimination! Car Insurers are fully within their rights to identify a specific risk group of clients within an easily identifiable and manageable risk category.

There are many reasons for the perceived lower risk – which could include amongst others the fact that on average women drivers are driving far less than their male counterparts, tend to drive slower and are not trying to “show off” their driving skills. Female drivers will be able to benefit from these perceptions and even the more aggressive female driver will be able to qualify from a lower “base rate” for her car insurance premium.

This is not an opportunity for vehicle owners to register and insure all vehicles in the names of their spouses. Remain truthful in your insurance application – and if the regular driver is a male driver – it must be disclosed as such. Failure to do so will be fraudulent and could result in your claim being rejected!

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The internet can offer cheaper car insurance quotes!

Written on November 6th, 2009 by admin
Categories: Car Insurance Advice, Cheaper car insurance

cheaper car insuranceWe have recently revealed that there is much pressure on the car insurance industry and the ability to offer affordable quotes. Increased road accidents and vehicle theft are adding to the effects of the credit crunch – making it difficult for car insurers not to increase premiums. We have also discussed how the vehicle owner can find cheaper car insurance premiums by focusing on the way that he drives, focusing on his car and personal needs – and also how shopping around can be the solution to finding these affordable premiums.

I would like to reflect on the internet as a medium to save the consumer from the escalating costs of car insurance. I have come across an article by Sara Rich in the Australian, titled “Internet driving down car insurance costs”

This reflects on the car insurance industry in Australia and significant changes that are happening Down Under!

A few of the interesting facts from this article are:

  • Australia has a $7.5 billion car insurance market
  • The general insurance market is estimated at $24bn
  • The market has been dominated by four players — Suncorp, Insurance Australia Group, QBE and Allianz
  • Newer challenger brands in the market include names such as Budget Direct, Cashback Car Insurance, Ozicare, ibuyeco, Real Insurance, Youi and Bingle Insurance – these are predominantly online businesses.
  • Other new players include Coles (available at present only in Tasmania), Australia Post and Virgin

The author notes that the internet is stirring up competition in the car insurance market as the online brands are looking for ways to drive down costs and offer much cheaper prices. These savings are often hundreds of dollars.

How do they do this? By setting up shop online, these insurers are able to strip away a lot of their overheads, such as call centres and retail outlets, and pass on the savings to their customers. The online insurers are growing at a much faster rate than the rest of the general insurance sector.

The online insurers are perceived as competitors with a more aggressive use of technology and different business models. They offer bonus payments or more aggressive refunds for loyal customers and often a ‘pay as you drive’ model where people are paying on the basis of kilometres used.

There are always the sceptics who believe that these new insurers, offering significantly reduced premiums in a rising claims environment, are simply not sustainable…

Even though these new players might have to correct their pricing as the financial environment evolves – it might be a good idea for consumers to give them a chance and request quotes via the internet. Competition is good for the industry and the client. It keeps both on their toes and will allow the consumer to save money in times where every small saving can help to address other financial needs such as healthcare or putting food on the table!

Look out for South African companies that are committed to using the internet as a medium to save the consumer from the escalating costs of car insurance. MiWay comes to mind.

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Layered vehicle security needed for affordable car insurance

Written on October 27th, 2009 by admin
Categories: Car Insurance Advice, Car Insurance Claims, Cheaper car insurance

security-systemsWe have previously discussed how a few basic steps by the vehicle owner can prevent vehicle theft. These include attention to safekeeping of keys from car key theft and a focus on parking the vehicle in a safe location. They are only the first steps in reducing car insurance claims caused by vehicle theft.

Experts in the car insurance industry believe that no single security system is perfect, but with several layers of vehicle protection, we can go a long way in protecting ownership! A significant portion of vehicles are broken into with the intent of stealing the vehicle itself, so by combining several visible simple, inexpensive physical theft deterrents we will discourage the would-be thief from breaking in driving off with the vehicle! The more layers of protection on your vehicle, the more difficult it is to steal…

What are these layers of protection? The answer can be found in the factors that influence the risk profile of vehicles. These factors include the effectiveness of anti-theft devices, the role of electronic security devices, the age of the vehicle, desirability of the vehicle, intended markets and the marking of vehicles.

There are many types of anti-theft devices available on the market and it should not be difficult to find one that fits your budget and suits your needs. We can distinguish between active and passive anti-theft devices.

  • Passive devices automatically arm themselves when the vehicle is turned off, the ignition key removed, or a door is shut. No additional action is required.
  • Active devices require some independent physical action before they are set, such as pushing a button, or placing a “lock” over a vehicle component part. This physical action must be repeated every time the anti-theft device is set or it will not function.

Which ant-theft vehicle security systems are available?

  • Alarm System: If you don’t have an alarm system, get one! The noise alone may be enough to scare away an inexperienced thief and prevent the break-in. You should install an alarm system that will sound when someone attempts to break in, move, tilt, or start your vehicle.
  • Factory-option alarm systems are generally best, but a carefully installed, properly calibrated aftermarket system can provide just as much safety.
  • Gear Lock: A gear lock is an affordable and a very effective anti-theft device.
  • Steering wheel locks: Consider buying a visible mechanical locking device to lock the steering wheel. These are inexpensive and are recommended by some experts to be the most cost-effective theft deterrent on the market today.
  • Immobilizing Device: This prevents thieves from bypassing your ignition and hot-wiring the vehicle. Some of these electronic devices have computer chips in ignition keys. Other devices inhibit the flow of electricity or fuel to the engine until a hidden switch or button is activated.
  • High-tech devices also include smart keys, high security locks & keys, fuse cut-offs, kill switches; starter, ignition and fuel disablement.
  • Tracking Device: These systems have become very accurate and affordable. A tracking device emits a signal to a police or monitoring station when the vehicle is reported stolen. Tracking devices are very effective in helping authorities recover stolen vehicles.
  • Etched vehicle security: Etch the vehicle identification number (VIN) onto the doors and fenders of your car with an electric engraver for extra protection. This helps to discourage professional car thieves, who will have to remove the markings to resell the car.
  • DataDot Technology: Micro-dotting technology makes it impossible to hide the original identity or a vehicle and makes them less desirable to criminals.

It is also important to have these anti-theft systems installed properly, or you may risk damaging the device or even your car’s electrical system. Ask an expert to do the installation for you!

The vehicle owner should always communicate clearly with the insurer before purchasing an anti-theft device. Ask your insurer which anti-theft systems they require and which of these systems will lower your car insurance premium! Ask them to provide this confirmation in writing. It is common practice for insurers to offer higher insurance discounts for automatic anti-theft devices (such as passive-setting alarms).

Most important is that the mere presence of an anti-theft device is not enough! The anti-theft device needs to be activated – always activate the system when leaving the vehicle – even if you only plan to be away for a short while. In the unfortunate event of a car insurance claim for theft you WILL be asked not only whether there were anti-theft devices – but also whether they were operational or switched on!!

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Can car insurance rates go down without customer action?

Written on October 19th, 2009 by admin
Categories: Cheaper car insurance

Can-car-insurance-rates-go-down-without-customer-actionWe have recently spent much attention on ways to find cheaper car insurance premiums. In a series of blog posts we focused on efforts required from the side of the insurance client such as responsible driving, shopping around etc.

By doing the right things and putting in some effort, it is possible to reduce your car insurance premium. But can these car insurance rates reduce without any action on the part of the consumer?

It is interesting to find that in California in the US, many car insurers have, over the past 3 years, lowered the car insurance rates. Substantial savings have been made possible as the stage was set for clients to shop around.

It is however not only the efforts from insurance clients that could result in lower premiums. Other factors resulting in lower rates include fewer accidents, industry competition, a cut back on driving due to higher gas prices, a slowing economy and the effect of regulatory changes in the insurance industry.

A spokesperson from the State Department of Insurance, Darrel Ng, remarked that the auto insurance market is very competitive and insurers know that people can shop around to find lower rates.

In the US it appears that a regulatory change now plays an important role in assisting the responsible driver to find competitive and cheaper car insurance. This regulation is called Proposition 103, a landmark auto insurance reform initiative passed by voters in 1988.

Prop. 103’s best-known provision — that insurers base premiums more on motorists’ driving records as opposed to where they live — began to be rolled out two years after a long fight between consumer groups and department officials that supported that provision and insurers that fought it.

Consumers are benefitting from these changes and this can only benefit safety on the road! Consumers have been warned however not only to focus on pricing –but also to find the insurance product that meets their needs!

It is important to view the car insurance industry as an evolving industry and not as something stagnant. Best advice for clients would be to keep an eye on the industry, to read about new developments and products and to discuss this with friends and industry experts.

Communicate with your insurer and read with caution all the materials and product offerings ending up in your post box… By doing so the client will be able to identify the good from the bad and more importantly, find the best financial solutions to meet his needs and save some money as well!

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Getting cheaper car insurance by focusing on your needs

Written on October 16th, 2009 by admin
Categories: Car Insurance Advice, Cheaper car insurance

cheaper car insuranceWe have discussed how cheaper car insurance can be acquired by the way that you drive, by shopping around and by focusing on the vehicle that you would like to insure. In this, the last blog post in this short series, we would like to focus on how attention to your specific needs could reduce your car insurance premium!

In the financial services industry the financial advisors are obliged to do a “financial needs analysis” before selling insurance products to clients. This requires them to gather from the client information about assets and liabilities, to calculate the financial needs of that client and only then to offer financial advice and products to meet those needs.

In the same way we need to approach car insurance cover. We need to establish exactly what our needs are and then align those needs to the insurance cover required at that specific point in time! Our basic need for financial protection might appear to remain the same, but our personal circumstances change and those changes could either increase or decrease our risk profile and our insurance premiums!

Most vehicle owners are aware of the decrease in value of their vehicles over time – and yet few of them communicate this to their broker or insurer. I have been called earlier this week by a broker informing me of the need to change the amount for which my vehicle is insured. It is however not only the vehicle value that changes, but also other personal circumstances such as age, distance travelled, risk area etc.

We would like to provide a few suggestions to consider – you might just be able to get cheaper car insurance by communication this with your insurer!

  • Only carry the minimum amount of coverage you need – always remember that the higher the cover the higher the premium.
  • Car insurance companies and brokers may try to sell you more coverage than you need to increase your premium.
  • Let go off coverage you don’t need. Cut your coverage and you will see a drop in your insurance premium.
  • Consider dropping collision and/or comprehensive coverage on older cars with a low market value. Such coverage often is not worth it because any claim you make probably won’t exceed the cost of the insurance and the deductible amount.
  • Shop around as you get older – you also might be able to pay less if you’re older than 50 or 55 and/or retired; if you’ve had no accidents or moving violations or if you have been a customer for a number of years.
  • Do not pay for extra and unnecessary roadside assistance – You may already have an adequate roadside plan through your life insurance, medical fund or credit card.
  • Peg back the number of named drivers. The more you have on your car insurance policy, the more you’ll pay.
  • Do you still have younger or inexperienced drivers on your insurance? – they might have left home and will only raise your car insurance premiums.
  • What is the average travelling distance disclosed to your insurer? If you do not drive this distance any longer, you can inform your insurer, thus resulting in a possible reduction in your premium.
  • Female drivers are regarded as “safer” drivers and less of a risk. Some insurers will offer cheaper car insurance premiums for female drivers – women are also better shoppers than men- remember to shop around for cheaper car insurance premiums!
  • Have you changed your address and notified your insurance company? If you live in a rural community with little crime and traffic congestion, your insurance premium will generally be lower than if you live in an urban area where your car is more likely to be stolen, vandalized, or involved in an accident.
  • Do you still have the same occupation as at the time when you purchased car insurance – you might now have a desk job, travel less and qualify for a cheaper insurance premium!

Do not expect your insurer to approach you with advice on reducing your car insurance premium. Be pro-active as your personal circumstances changes, review your policy thoroughly and inquire about withdrawing any unnecessary coverage. Reducing car insurance premiums do not happen by itself – you have to initiate change! Do research, ask questions and make informed decisions!

Also view:

  1. Getting cheaper car insurance by the way you drive.
  2. Getting cheaper car insurance by shopping around.
  3. Cheaper car insurance by focusing on your car!
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Getting cheaper car insurance by shopping around.

Written on October 14th, 2009 by admin
Categories: Car Insurance Advice, Cheaper car insurance

Getting-cheaper-car-insurance-by-shopping-around

In an earlier post we discussed how to get cheaper car insurance quotes by the way that you drive. This places the focus on maintaining an accident free record and driving as a responsible and vigilant motorist. Perhaps we should consider another starting point. Even a good driving record and responsible driving behaviour might not get you the most affordable car insurance premium…for this you need to do so some effort and shopping around!

To find the cheapest or most affordable insurance cover for your car, you will need a bit of homework/ research, and many more bits of clear communication! The car insurance marketplace is highly competitive with many insurers and companies in the car insurance marketplace trying to undercut everyone else. Use this to your advantage once you know what you need!

We would like to provide the following advice/ suggestions to the prospective car insurance client:

  • Start by doing a bit of research and reading about car insurance.
  • Familiarize yourself with the terms and conditions of a car insurance policy.
  • Talk to friends about their experiences and pitfalls they might have experienced with their insurers.
  • Once you have a bit more knowledge – it is time to shop around and ask for quotations!
  • Before you buy a new car, contact your insurer to learn how much you’ll have to spend for car insurance. Premiums can significantly change, depending on the model, year and the make of a car.
  • Rather spend a bit more time in the quotation and search phase – Call a few insurers to make sure you’re paying the lowest overall amount.
  • Do not feel guilty to approach an insurer if you already believe you have a favourite provider in mind – ask many insurers – this is what they do! They provide quotations based on the information disclosed to them…
  • Ensure that you get all quotes on a like for like basis so that you get a true idea of what you could be paying for the same quality and level of cover.
  • Ask about discounts!
  • You may receive a discount from your car insurance company if you buy more than one type of insurance through that same company (e.g., car and home insurance).
  • A discount may also apply to your car insurance if you insure multiple cars under the same policy or with the same company.
  • You can earn money-saving discounts for taking a defensive driving course or staying with the same insurance company for a number of years.
  • Discuss with the insurer to increase your voluntary car insurance excess a little – This is what you pay if you make a claim. A higher excess usually means a lower premium.

Also consider how and where you do your shopping. Know the difference between brokers, direct insurers and insurance aggregators and how they have an influence on your car insurance premium. Consider doing business on the Internet – Financial products are sometimes far cheaper on the Internet than elsewhere.
Once you have found some quotes that you like (ie good price, good policy features and benefits) it is time to make even more savings as you start playing around with the quotes! Ask yourself whether you understand all the contents and fine print and whether you need all the benefits and cover offered. Share and discuss with a good friend who might have some experience of his own to share with you!

Be prepared to do the legwork, if you want a good deal. Communicate clearly and in complete honesty with the insurer and allow yourself enough time to make an informed decision. Do not feel coerced into signing any policy document before you are comfortable with the price and the product!

  1. Getting cheaper car insurance by the way you drive.
  2. Cheaper car insurance by focusing on your needs.
  3. Cheaper car insurance by focusing on your car.
Share and Enjoy:
  • Print this article!
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