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Category:
Insurance
News /
Short Term
Insurance /
November 2007
Short Term Insurance Costs – continued…
Many people fall prey to high insurance costs which they could have
avoided by just being a little extra careful. In South Africa today,
short term insurance is a little over-the-top price wise because of
the high risk status the country finds itself in. These coupled with
high interest rates and high debt levels with lower savings rate
cannot be good to consumers. As such, consumers need to monitor
costs so as not to fall into default which could be to their
detriment should the unplanned happen.
What
leads to higher short term insurance premiums in South
Africa?
Some Insurance Industry experts say the evolving realities of South
Africa’s driving environment and level of risk are the main enemies.
Our roads are busier, public transport is challenging by the day and
driving is simply accessible to everyone even those ineligible.
Short term insurers usually viewed younger drivers between the age
of 18 and 30 as having the greatest chance of being involved in an
accident. And these risks tend to minimise or disappear by the age
of 30 as most of these drivers obtain stable employment, starts
families and become relatively more predictable and stick to some
routine.
Another unfortunate yet premium hiking situation is led by the
demographics and economics of South Africa. These are elderly
previously disadvantaged individuals whom are now affluent and tend
to acquire cars or movable assets at a much older age yet still are
inexperienced.
There are also higher claiming patterns to older parents between
ages 40 to 50 where parents move from being stable to taxi drivers
for their children, dropping them to and from schools, over the
weekend events, midnight parties, etc
Another cost hiking factor is caused by the latest and the greatest
in technological gadgetry that today’s cars possess. More gadgets
lead to high repair costs should the unfortunate occur. Leather
seats, parking sensors, on-board computers, air bags, run flat
tyres, etc can be really expensive to re-install or repair and are
often very easily damaged in an accident.
So
what could one do to lessen these costs?
Industry experts advise the following as the ultimate short term
insurance premium minimiser.
Usually when you get an
insurance quote, there is a voluntary
excess, increasing this to a suitably higher yet affordably number
lowers the monthly premiums.
Most insurers would not accept certain vehicle models without a
tracking device and fitting these on more modern and presumed safer
models will definitely lower the premiums
Some vehicle manufacturers (the common being BMW, Mercedes Benz,
Audi and Volkswagen) or the Automobile Association (AA) offers an
advanced driving course at a cost. Attending one of these at a
recognised school will add some points to you
The claim history of the insured. The less claims or cheaper claims
you have, the better the chance of negotiating a good price.
Some obvious risk aversion tactics like securing your home or where
your car is parked both at work and at home, fitting extra security
features to the vehicles and of course minimising the number of
designated drivers to maybe two elderly and more responsible
individuals with favourable claim history.
Insurance is based on the value of the car, get fixed to an agreed
value of the vehicle so that your costs are fixed lowering only when
the value of your vehicle does. Also, according to Lion of Africa
insurance, the colour of cars affects claims. Some colours, like red
and black are higher collision risk as they are more invisible on
the road whilst other colours get lower premiums and are more
visible. Another unfortunate fact is that a white vehicle is a
higher theft risk as it’s easier to respray quickly.
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