And 5 ways to reduce your premium today
Over the last 5 years, car insurance has become more expensive, putting strain on the average South African’s pocket. Clearly the overall increase has a lot to do with rises in inflation and tough economic conditions, but there are other significant reasons why you’re paying more today to cover your car.
For instance, there’s been a boost in how frequently people are claiming and the severity of these claims. This impacts the price you pay because insurers pool the premiums paid by their clients for cover against similar risks and then pay for losses out of this pool. To be profitable, insurers work on an acceptable loss ratio of 60% to 70% between pooled premiums and claims paid. More and bigger claims increase the loss ratio, which impacts the underwriting process and results in higher insurance premiums.
Another key reason why your premium has gotten more expensive is changes to legislation and regulations. The regulatory environment has become much stricter and businesses have incurred major compliance costs.
These factors are out of your control, but there are things that you can do to reduce your monthly premium.
1. Reduce your premium by choosing a higher excess
Some insurers let you choose your own excess so that you can influence your premium. When you choose a higher excess, your premium will go down so this is a pretty good option to reduce how much you’ll pay.
Remember, the excess that you choose must be affordable, because if you claim from your insurer, you’ll have to pay this amount before your insurer settles the rest of the bill to repair or replace your car.
2. Choose decreasing premiums
There’s a world in which your premium decreases every single month and you don’t have to go through a magic door to find it. All you need to do is contact King Price. The royal insurer is the first to offer South Africans decreasing premiums with their comprehensive car insurance. Simply, your premium goes down to correspond with the monthly depreciation in your car’s value. It’s that simple and there are no bizarre catches.
3. If things change, then make sure to update your personal details
It’s a requirement for you to update your details with your insurer when things change, to make sure that your policy is valid. More than this, though, updating your details could reduce your premium. A good example is if you move and your new home has a garage that you can lock your car in. Your premium will go down as a result of this change.
4. Improve your car’s safety
Your insurer will generally reward your efforts to make your car safer and less easy to steal. For instance, you could install an approved alarm, immobiliser or tracking device and as a result, your premium could be reduced.
5. Shop around today
Compare quotes from top insurers so you can get the best price and value for money. King Price, for instance, offers super cheap comprehensive car insurance with decreasing premiums, so your cover reduces every month in line with the depreciating value of your car. You’ll also get roadside assist at no extra cost to help you out of tough spots on the road.
If you want to get cover for the first time or are considering changing your insurance to King Price, click here for a quote, call their sales team on 0860 50 50 50, or send an email to [email protected]