Suggestions for Discovering the Most cost-effective Automotive Insurance Deal – IOL
Insurance is often viewed as a “grudge buying” – in other words, something you don't really want to spend money on, but something very important. You don't appreciate it until life happens and you need it – and only then can you appreciate having it in the first place.
Insuring your car doesn't have to cost a fortune. It is a good idea to learn more about how insurance works so that you can make informed decisions about what to choose to insure your vehicle and how to minimize those costs.
There are a number of factors that affect an insurance premium and there are questions you should ask your insurer in order to keep costs down. There are also tips that we can share with you.
This is how the premiums for car insurance are calculated
According to Christiaan Steyn, head of MiWay Blink, some people believe that car insurance is beyond their financial reach, even though there are affordable solutions that can protect their vehicles and bags.
The following considerations are used by insurers to determine your auto insurance premium:
● What is your car worth ?: The type of vehicle you buy has a huge impact on your insurance premium. For example, the average value and subsequent repair cost of a luxury SUV far exceeds that of an entry-level hatchback, and the premium on auto insurance will reflect that.
● Deductible: The deductible is the amount that you are willing to pay yourself during a claim. It is the part of the risk that you "self-insure". The higher the deductible you agree, the lower your monthly insurance premium. Click here to find out more about “Excess”.
● What are the best coverage options available ?: Depending on your circumstances, you should be able to choose between different types of coverage.
● Your driving record: previous claims, such as the number and extent of accidents in which you were involved, are taken into account.
Steyn says the first step is always to make sure what type of insurance you need for your vehicle.
To ensure you are getting the best deal possible, it is always a good idea to have a number of questions ready to ask your insurer as you go through your options.
Your budget may dictate that you go for a lower premium option, but then it's important to have access to savings or an emergency fund that you can use to pay the higher deductible if necessary.
“Ask yourself whether you only need the basics or whether you are looking for a plan that includes a little more,” says Steyn.
You can adjust your premiums by asking your insurer the following questions:
● Can my deductible be changed to lower my monthly premium?
● Are there add-ons included in the standard package that can be removed to reduce the premium? An example of an additional benefit is car rental (access to a rental vehicle while your vehicle is being repaired) or a Drive-Me-Home service.
● Do you offer discounts or cashback in months when I drive less and my car is in the garage most of the time?
Insurers should allow you to change your coverage to suit you. The trick is to find a good balance between your premiums and your deductible.
According to Steyn, there are three more considerations to ensure you are getting the best auto insurance deal:
● How easy is it to interact with your insurer? If you find it difficult to chat with your insurer, this could be a warning sign. If your insurer has invested in an app or website that allows you to have a smooth and fast registration process, it can also be an indication of how stress-free it can be to deal with the insurer in the event of a mistake.
● Other drivers: Will your sibling, parent or partner drive your car from time to time? In this case, make sure that your policy also covers accidents involving other drivers.
● Annual Adjustments: Check with your insurer annually instead of letting your policy be renewed without you noticing the renewal date. Make sure the information in your policy reflects your current situation and update it if something has changed.
Christiaan Steyn is the head of MiWay Blink.
* The views expressed here are not necessarily those of the IOL or front pages.