In a tough economic climate, South Africans are always on the lookout for ways to save. Cutting back on insurance premiums is often seen as an easy way to save money. All good, until you lodge a claim and suddenly find that your ‘saving’ now leaves you with an expensive problem.
“With Savings Month focusing attention on budgeting it is a great idea to review personal spending and consider saving money on insurance premiums”, says Hannes Oelsen, Head of Claims at MiWay Insurance.
But you need to ensure that in your haste to save money you don’t compromise your policy cover and end up footing most of the bill for a claim.
“Many South Africans take the first insurance option offered and don’t even read the policy,” says Mr Oelsen. “Consumers should take some time to do research to make sure they know what their insurance policy covers and that they are comparing apples with apples.”
He also advises customers to:
• Choose a reputable insurance company. A more prominent insurance company with a market presence may have higher premiums, but offer more benefits including lower excesses and better coverage for items such as damaged windscreens.
• Read the policy documents thoroughly. Most reputable insurance companies write their policies in ‘plain English’ so they are easily understood. If you are considering a policy document that has many clauses and is difficult to understand, it may pay to get an expert to explain its contents.
• Consider a combined car and household package with a single insurer which may result in the premium being discounted.
• Read the FAQs found on most insurance websites. These are very informative and will help you choose a policy.
• Review the excess you will have to pay when lodging a claim. The general rule is that the lower the premium, the higher the excess is going to be. You can ask an insurance company to increase your excess to reduce your monthly premium but then be aware that you can afford the higher excess payment if you have to claim.
• Find out about discounts. Many insurance companies will offer lower premiums to people who have completed advanced drivers’ courses. Other factors that could also qualify for rebates include:
o Having an excellent driving record.
o Having a history with a company and not filing a claim for several years.
o Having secure garaging at home and work. This reduces the possibility of theft.
o Using the car only for private purposes. Business insurance is recommended if the vehicle is used for business purposes.
• Consider the car you are buying. The higher the value of the car, the higher the premium. This guideline also applies to rare cars, high-performance sports cars and vehicles that have costly replacement parts. The more common your vehicle is and the cheaper it is to repair, the lower the premium.
“Insurers, like many other companies, will consider the credit history of an individual seeking insurance cover. A good credit score is often rewarded by lower premium payments as the likelihood of a person defaulting on premium payments, or even not making excess payments, is reduced. Prove that you are a responsible person and you will save money on insurance,” says Mr Oelsen.
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— Arrive Alive (@_ArriveAlive) May 1, 2019