How to Keep Car Insurance Premiums Low
January 19, 2018
Premiums are the least of the problem regarding car insurance. A recent survey by the South African Insurance Association revealed that over 30% of the vehicles being driven on the country’s roads are insured. This is alarming if in light of South Africa’s accident statistics and recklessness witnessed on the highways daily. But there is a good reason for the overwhelming apathy when it comes to car insurance.
Many households in the country are essentially working to service loans. Research has shown that as much as 75% of what the average South African earns goes to the repayment of different kinds of facilities. With such a huge chunk of their income hacked off soon after payday, they have little left to carry them through the month. This would make car insurance seem a luxury they cannot afford.
Tips to pay lower premiums
With motor insurance not being a legal requirement in South Africa, many motorists, already laden with obligations, happily opt out. Others who initially had insured their cars cancel their policies when things get tough for them financially. But instead of opt out of insurance or cancel your policy, you can use the tips below to keep your premiums low:
- Higher excess: Some car insurance policies will require you to stump up some cash when processing your claim. This is called excess. If you agree to pay a higher excess sum, the insurer will lower your premiums.
- Security features: The more security features your car has, the less at risk it will be considered and thus the lower the chances you will make a theft claim soon. In view of this insurers will lower your premiums. Install a tracking system or advanced car alarm will give you better negotiating power. In addition to these internal security add-ons, you can make your vehicle less prone to theft by parking it in a lockable garage or basement. Your insurer will count it as less at risk and burden you less every end-month.
- Safe cars: The type of car you buy also has an impact on your premiums. High-power super cars that attain top speeds in seconds are considered high-risk thus attracting higher premiums. To reduce the damage on your paycheck, consider buying a more docile model with loads of security features.
- Clean history: Insurers like a policyholder with no gaps or breaks in their insurance history. If you had a policy previously then canceled it midway or simply stopped paying your premiums, they will view you as a high risk and up the premiums on your new policy.Similarly, a clean driving history will see you categorised as low-risk and could lead to lower premiums. If you have little road experience or have a history chequered with accidents, the converse will be true.
- Good combination: If your provider has a combined household and car policy, go for that. Chances are the overall premium will be lower than what you would pay for the two policies separately.
Use the above tips to rein in high premiums rather than chuck your policy when financial pressure mounts. You could save yourself a huge repairs bill or the cost of replacing a stolen car.
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All info was correct at time of publishing