Every year, car insurance policyholders receive a very special letter, and no… It’s not their acceptance to Hogwarts. Unfortunately.
It’s the annual review letter that you get on the anniversary of your policy to inform you of any changes or updates to your cover, and it often includes an increase to your premium. This could be the result of changes to your risk profile, the inflation rate going up, and other economic factors that have caused your insurance to get more expensive.
This is also the time, coincidentally, when everyone flocks to Google to compare quotes online and switch to a different insurer, even if it’s just to save a few Rands. There are times when this might be the right move, but you should be aware of all the cons involved in switching your insurance every year.
Here are 4 reasons why you should consider staying loyal to your car insurer.
#1 You’ll constantly pay admin fees
Every time you take out an insurance policy, you pay an admin fee. This covers the cost of setting up your policy, creating documents in your name with your specific details, and a few other bits and bobs.
This fee isn’t usually very expensive, but if you change your policy every year it adds up. So, think carefully about how much you’re saving by joining a new insurance company vs. how much you’ll pay to join them.
#2 You’ll lose that special relationship
Not everything is about money. For instance, if you’re confident in the great service that you receive from your current insurer, it might not be worth sacrificing this so that you can save a bit.
You also know your policy docs and what you currently are and aren’t covered for, as well as how to navigate the claims process and emergency assist services that kick into action when things go pear-shaped. This kind of familiarity makes life less stressful if the worst happens and your car is stolen or involved in an accident.
When you switch, you’ll have to build a new relationship with your insurer, you’ll have to go through new policy documents, re-save numbers, and become familiar with different processes. This can be a hassle.
#3 You lose out on compound savings
When you’re notified that your premium is going up and you notice that your car hasn’t magically transformed into a better car, it can be a bit frustrating. After all, if your car is worth less, then surely you should pay less?
King Price took a stand and became the first (and only) insurer to offer super cheap comprehensive car insurance that decreases monthly in line with the depreciating value of your car. Their motto is that the longer you stay, the less you’ll end up paying.
Here’s some basic maths to show you how much you might save:
- When you join: Super cheap insurance.
- After the first month: Your premium decreases by R10.
- After the second month: You’ll save R30, because this premium is calculated at R10 less than the first month.
- After 12 months: Save R660.
- After 3 years: Save R6,300.
(Bear in mind that your premium and monthly discount are unique to you as they’re based on your individual risk profile and insurance history.)
#4 You could lose out on discounts
Some insurers offer unique discounts, which you’ll lose if you cancel your cover with them. For instance, some companies offer a bundled discount if you take out car and home insurance together. Others, like King Price, offer a multiple car discount, which reduces your premium if you add more cars to your cover. Simply, you’ll get 10% off your premium when you insure 2 cars, or 15% off when you insure 3 cars, and 20% off when you insure 4+ cars. Oh, and your premiums will still decrease monthly.
Paying R100 less might not be worth it, if you’re sacrificing R175-worth of bundling and multiple car discounts.
So, what should you do?
The key is to find an insurance company that ticks all these boxes and then stick with them. You could, say, get super cheap (tick) comprehensive car insurance from King Price, enjoy their award-winning royal service (tick) and easy-to-understand policy documents (tick), and then pay even less with their decreasing premiums and discounts (tick).
If you want a super cheap quote online in a few minutes, just click here or you can talk to a friendly consultant by calling 0860 50 50 50.