Paying for someone to protect your assets and liability in case something that might never happen to you happens is awesome. Insurance rocks. While all the big firms would like you to believe that price shouldn’t matter, cheap insurance does because you don’t want to pay for ‘in case’ to begin with. There are ways to reduce even how much you pay with them without reducing how much cover you get.
As insurance is always about mitigating risk between you and the insurance company, the less risky you are, the less you have to pay for them to cover. Here are some ways to reduce how much you pay on short-term insurance, no matter the type, without reducing the amount of cover you have.
All claims are a risk to an insurance company as it means they’ll be paying out money. The more you do this, the more you pay on premiums because you’re more of a risk. Insurance companies assess your risk by determining how many times you’ve claimed in the last three years. If you haven’t had insurance for three years, you’re automatically assumed to be a higher risk. While certain claims are unavoidable, such as for a stolen vehicle, other damage such as dents and scratches can be covered yourself.
Secure your assets
As the risk of theft is also factored into the premiums, unsecure assets will cost more. That is, assets that are not protected from theft will cost more. If this is a car, then fit it with a tracking device, park it inside a locked gate at night and don’t drive into bad neighbourhoods. (Some insurance companies allow you to designate the areas in which drive to reduce your risk to them. If the car enters a dangerous area outside of your designated zones it will notify you.)
If the asset is portable possessions or home contents, fit your home with an alarm and get electric fencing. Living in a safe neighbourhood is obviously an even better option, but that’s not always practical.
Increase your excess
Only increase your excess if you can afford it. Increasing your excess to an amount that is unaffordable invalidates the point of the insurance. Insurance companies impose an excess or deductible to prevent insureds from making claims on small amounts. Increasing how much you’ll cover smaller claims for, will reduce your risk to the insurance company.
We would say that. But short-term insurance in South Africa is one of the most competitive industries, which means that you have more choice to find better value for your money. Even if you don’t intend on changing insurance companies, compare quotes to make sure you’re paying market related prices.
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