If you are feeling the pinch of car insurance premiums in South Africa, then you should consider ways to save on cover without giving up your policy altogether. Times are tough and you are not alone in feeling the financial sting of insurance premiums. South Africa’s high vehicle crime and road traffic accident rates do not help the situation. It directly impacts on the cost of car insurance in the country.
The reality is that car insurance is necessary in South Africa. It does not matter whether you drive a brand new car, a second hand model or an old clunker that is considered a vintage. There are no alternatives to car insurance that can offer the same benefits. Rather look at how you can restructure your existing policy to save on car insurance premiums.
How To Save on Car Insurance Premiums
Most of us know that lower premiums means a higher car insurance excess. However, there are several other ways to reduce your car insurance premiums. It may not always be a massive saving but the combined savings do add up in the long run.
1. Lower Your Car Value
First and foremost you should look at lowering your cover if possible. Many car owners do not examine the finer details of their policy. Remember that the value of your car is decreasing every year. You should not be insuring your vehicle at the price that you purchased it. When it comes time to claim for vehicle loss, your insurer will only pay you according to current value of the vehicle and not the insured value. You would have been paying extra on your premiums for years but not get the full cover that you thought you had.
It is at times like these that it is worthwhile to have a broker. A good short term insurance broker would provide you with these tips to save on insurance. A broker will also handle the paperwork with your insurer to ensure that your vehicle is covered for its current value. Be cautious about the financed amount of the vehicle in terms of your car loan that you owe to the bank. If the payout is less than the outstanding loan then you will have to pay the difference from your pocket, unless you have gap cover.
2. Opt for Cheaper Cover
Cheap car insurance does mean less cover but it is better than no cover. Before you give up your policy, speak to your insurer about cheaper plans. You may look at basic car insurance, which includes third party cover and non-accident vehicle loss benefits for you. Third party car insurance is the cheapest but only covers accident damage to other vehicles. These policies are not as extensive as comprehensive cover, and are therefore cheaper.
However, with the rising insurance costs and at times crippling premiums you will at least have some sense of security by reducing the level of cover. Be careful though. If your car is still under finance then you have a commitment to keep comprehensive car insurance. Remember that until the car is paid off, it technically belongs to the financial institution that loaned you the money. Most lenders clearly stipulate that you have to keep comprehensive car insurance. You also have to ensure that premiums are fully paid. If the insurer does not pay for the loss of the vehicle then the finance company can hold you liable in your personal capacity.
3. Pay Your Premiums Annually
One of the simplest ways to save on car insurance is through annual premium payments. The savings may vary but most insurers are negotiable with a discount on annual premium. It may be difficult to pay a lump sum but you save in the long run. Since your premiums can fluctuate year by year, most insurers will not allow you to pay for more than one year as a lump sum.
If a single annual payment is not affordable for you you then look at other options like two lumps sums in the year. Some insurers may not be flexible to break up the payments in this way. However, it is worth speaking to your insurer about these lump sum options. Remember that insurers would rather help you save on car insurance than lose you as a client to another insurer with cheaper premiums.