With petrol prices at an all-time high, inflation on the rise, and everything in between becoming more expensive, cutting down on insurance costs can help you make ends meet.
While it may seem attractive to do away with your insurance completely in the hopes that nothing bad will happen, removing all your cover when finances are tight can end up doing more harm than good, according to King Price client experience partner Wynand van Vuuren.
This is because if something does happen to you or your vehicle and you were not covered, the damages arising from the situation will fall onto your pocket and could be much more costly than a monthly insurance premium.
“There’s no doubt that insurance is seen by many as a grudge purchase. But it’s a critical tool that helps protect our homes, cars, and possessions,” said Van Vuuren.
He, therefore, supplied the following tips for motorists looking to cut down on their insurance spending.
Bundle policies
Insuring more than one car on the same policy at the same insurer could assist in lowering monthly premiums. If possible, also including your building insurance and home contents cover can bring even more savings.
“Most insurers will give you a discount if you place all your business with them,” said Van Vuuren.
Review current insurance
Make sure your vehicles, buildings, and home contents are covered for their current replacement value, not their market value, as being under-insured could be nearly as costly as having no cover at all.
“For example, if you insure home contents worth R1 million for R500,000, you would only be paid 50% of any claim,” he said.
Review excess payment
Your excess is the first amount payable on any claim and the higher the excess you choose, the lower the monthly premium you will generally pay.
However, you must also be careful not to choose too large of an excess payment as you still need to be able to put forward the full amount in the event of a claim.
Reduce risks
Each individual’s monthly insurance rate is calculated based on the risk that person poses to be insured.
If you suddenly live less risky – for example, you are working from home and driving less, or have moved to a safer area – let your insurer know and you should also see a difference in your premium.
Talk to your insurer
Tell your insurer when you can no longer afford a monthly premium.
Most insurers will then assist in helping to get as much cover as possible for your budget in order to protect your most important assets.
“Insurance is one of the few things we buy that we hope never to need. And all those premiums can really weigh on the budget” said Van Vuuren.
“But if your finances are under pressure right now, talk to your insurer to see what you can afford.”
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