The lowest car insurance rates are not always the best value
December 19, 2017
What are main issues to think about when looking for the lowest car insurance rates?
- Even though you can afford the monthly fees, the high excess amount written into the policy could price you right out of the market if you have a smash.
- Don’t take out cheap cover with a non-registered Financial Service Provider as these firms are often fly-by-nights.
Lowest Car Insurance Rates – What does an Excess payment Mean?
Be aware, low premiums often mean high excess payments. The excess is the uninsured portion of your cover.
For example, let’s say your monthly fee is R200, which you can afford. But the excess amount could be R7 000 to R10 000 which you must pay in the event of a smash. Only choose this if you have savings to cover that excess.
Cheap car Insurance – What is a Financial Service Provider? (FSP)
A short-term insurance firm (FSP) must register with the Financial Services Board (FSB) to be recognised. Established more than 20 years ago, the board regulates the short-term industry.
There is little point in shopping around on the internet for cheap car insurance when four of the six quotes you get are from unheard-of companies. You need to find cover you can afford from a member of the FSB.
Cheap car Insurance – What are the Options?
Comprehensive cover costs the most. It insures you for just about anything, from hail damage to collisions. Best buy for cars 10 years and younger.
Choose Third Party Fire and Theft for an older model. That covers you for damage to another car, as well as for fire damage, theft or hijacking. It does not, however, cover the cost of damage to your car.
Third Party is very cheap car insurance. Covers you for damage to another car,but does not pay for damages to your car.
Cheap car Insurance – Conclusion
It is not always cheap car insurance that offers the best benefits. Often cheap car insurance comes at a price, such as conditions about the hours during which you may drive your car.
Don’t buy cover just because the premiums offered are low, at the very least make sure that the cover suits your risk profile.
Cheap car insurance carries a big excess payment. Find out if the excess is a fixed amount or a percentage of the total claim.
Finally, read and understand any exclusion clauses that are part of the policy to avoid nasty shocks when claiming.
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All info was correct at time of publishing