Car insurance isn't one of those things that you aspire to own one day when you're a kid. It's a bit of a grudge purchase but a necessary evil. As you progress in life, the value of your motor vehicle usually increases. Add to this the ever-increasing cost of living and the general inflation of vehicle prices and one ends up with a rather expensive purchase that needs protecting. This is where insurance comes in. It's the failsafe that will help ensure that you are not in a worse off financial position should something happen to your vehicle.
Related: Is it better to get car insurance from a broker or to go direct?
It's rather irresponsible to drive on our roads without at least the bare minimum of third-party cover. This will look after the other person's property (their vehicle or otherwise) should you be involved in an accident. However, that will still leave you to pay for your own repairs - not a great predicament to be in.
While insurance may seem like an unnecessary expense every month for something that you can't see or feel, it's essential to your financial wellbeing, especially in the years to come. While it may be easier to go without, you can also look at reducing the monthly costs incurred with your insurance premium. It bears keeping in mind that reducing your premiums should be done the right way. Reducing your cover in order to eliminate some of the costs is the wrong way to go about things. You should always ensure that you have the correct cover for your vehicle, including items such as hail damage and windscreen replacements. Find out more about Comprehensive Insurance here: Car insurance explained - Comprehensive Insurance
Complete transparency
While this won't necessarily help you with your monthly premiums, it will go a long way in ensuring that you are left in the same financial situation after an accident as you were before. Any manipulation of the facts when dealing with your insurer can result in a claim being repudiated (turned down), leaving you with the full cost of the repairs, often to both vehicles. To ensure that this doesn't happen, be completely honest with your broker or insurer when taking out the policy or if anything changes. Omitting details or falsifying information is considered fraud and is punishable by the law.
10 tips to help reduce your insurance premiums
1. Vehicle choice
One of the greatest contributors to a high insurance premium is the make and model vehicle you choose to insure. Insurance is all about risk and if you own a high-risk vehicle your premiums will be higher. Known high risk vehicles such as the Volkswagen Polo, Toyota Hilux, Ford Ranger, and BMW 3 Series are all more expensive to insure than their counterparts. Choosing a 'safer' vehicle will help bring your premiums down. Don't swing too far in the opposite direction though as rare and uncommon cars are also riskier to insure due to a lack of parts.
2. Your risk profile
Not only is your vehicle's risk factored in, but yours is too. The area that you live in, your home security, where the car is parked and how far you travel on a daily basis all plays into your personal risk profile. It's known that some areas are more readily targeted than others with a greater chance of theft or hi-jacking. Parking your car on the street or just in the driveway also increases the risk. You're best off in a safe neighbourhood with manned security access, with your vehicle parked in a locked garage and behind locked gates.
3. Improve your credit score
As strange as it sounds, your credit score is a contributing factor to your insurance premiums. Having too many credit cards and too much debt flags you as a high-risk individual. Improving your credit score will make you 'safer' to insure. You can improve your credit score by reducing the number of accounts on your name, lowering your debt, and ensuring that bills are paid on time.
4. Shop around
When it comes to motor vehicle insurance, there are numerous companies that can offer you cover. It would be wise to get several quotes from reputable insurers before deciding on a policy for you. To make life a little easier, why not try a broker like IntegriSure. A broker will be able to offer you several quotes from various insurers and will be able to assist with tailoring a policy that covers you best. They deal with all the jargon and requirements and take the stress off of you. One call is all that is needed.
5. Driver training
Successfully completing an advanced driving course or a defensive driving course will show your insurer that you are a safer driver that knows how to behave on the roads. This improves your risk profile and may result in lower premiums. It's worth noting that not all insurers will offer a reduction in premiums with a valid advanced driving certificate, so ask your insurer before spending the money on the course in the hopes for a better premium. That said, an advanced driving course will help you down the line as you will be less likely to claim.
6. Look for specialized products
After the hard lockdown of 2020, many insurers realized that more people are working from home and travelling less. As a result, they created bespoke products to cater for individuals who don't drive as often. Ask your broker or insurer about these products and see if they fit into your lifestyle. Many of these will offer reduced rates if you drive less than a certain amount each month. Products such as King Price Chilli and Santam SmartPark are just a few examples. Once again, ensure that the coverage you're getting is comprehensive.
7. Vehicle safety systems
Fitting your vehicle with additional safety systems can help reduce your monthly premiums. A tracker device and aftermarket anti-theft system will help as will smash-and-grab films on the windows. Some insurance companies will pay for the installation of the tracking device but ask that you pay the monthly premiums. Speak to your insurer to find out what systems they recommend and which ones can help save you money.
Can installing a car alarm lower my insurance cost?
8. Modifying your excess
Excess is a self-insure aspect of your insurance policy. It's the amount that you have to pay in when claiming for damage. Altering your excess to a higher amount will reduce your monthly premiums but this is a gamble. While you may be able to afford the high excess with a single claim, two claims in quick succession may see you in a financial hole that you struggle to climb out of. A high excess can also be detrimental when the cost to repair your vehicle is lower than the excess amount; that can quickly turn a R4 000 repair bill into a R6 000 excess payment.
9. Multiple vehicles/items
Adding items to your insurance policy often works out cheaper than insuring the items individually. Placing your household items and non-specified items on the same policy as your car can help reduce the overall cost. Go with a reputable insurer or chat to your broken about and insurer that can cover your car, house, and non-specified items on the same policy. Adding your wife or husband's car to the same policy can also help reduce the overall costs.
10. Ask
You will be rather surprised what can be done if you simply ask. Giving your insurer or broker a call and asking them to review your policy and the premiums can often result in a reduction in premiums for the coming year. There's no need to strong-arm them, you simply say that you would like to see if your premiums can be reduced (while retaining the same level of coverage) and let them sharpen their pencils. A smile goes a long way in the insurance game.
