If you are researching short-term car insurance, you'll be sure to find out that prices are high, and could continue to rise. South Africa is a high risk environment for insurers. Knowing why and what you can do lower these costs for your situation is important in helping you make the right decisions.
First, why are the costs so high? Higher short-term insurance premiums are caused by the risks associated with car insurance, and South African roads have become considerably more treacherous lately. South Africa has one of the world's highest rates of traffic accidents and fatalities. Driving privileges have been extended to many people who don't know how to drive properly.
As carmakers continue to upgrade their offerings, prices reflect those gadgets, leather seats, on-board computers and more. As car prices go up, so must the cost to insure them. Younger drivers have always been viewed as a higher risk. Drivers aged 18-30 historically pay the highest rates.
Insurers must also consider car theft and hijackings as they calculate their premiums. The latest statistics show a decline in thefts, but the rate of hijackings continues to rise. In the homeowners and household insurance market, the main influencing factor is fraud. Some estimate are that six to 10 percent of short term insurance claims are fraudulent. That amounts to more than R2 billion each year.
Even though you have no control over the number of fraudulent claims, you can keep their effects from impacting your premiums. Try making the offer to your insurer to submit to a polygraph test each time you submit a claim. Many will offer a substantial savings on your premium in return for your honesty. Now, how can you overcome these factors for your own personal situation?
For car insurance, start by increasing you excess as this can lower your premium. Take this into consideration as you gather quotes. Also, be sure you can afford to pay the excess amount you choose in the event of a claim.
You need to keep a clean driving record because the more claims you have the less risk you have. If you already have an unclean driving history you can research driving courses that are offered by automobile manufactures and the Automobile Association, that can help offset negative history. This can be done by good drivers also. Most insurance companies will consider a reduction in your premium if you are able to attend and pass one of the courses.
Adding security devices can help as well. Anti-hijack devices and global tracking systems are good investments for this purpose. And, if you live in a high-crime area, consider moving. This can reduce both your car and homeowners insurance rates.
The cheapest insurance is not always the best. Be sure the policy you choose provides adequate cover for your needs at a price you can afford.Finally, shop around for the best insurance rates. But be smart.
First, why are the costs so high? Higher short-term insurance premiums are caused by the risks associated with car insurance, and South African roads have become considerably more treacherous lately. South Africa has one of the world's highest rates of traffic accidents and fatalities. Driving privileges have been extended to many people who don't know how to drive properly.
As carmakers continue to upgrade their offerings, prices reflect those gadgets, leather seats, on-board computers and more. As car prices go up, so must the cost to insure them. Younger drivers have always been viewed as a higher risk. Drivers aged 18-30 historically pay the highest rates.
Insurers must also consider car theft and hijackings as they calculate their premiums. The latest statistics show a decline in thefts, but the rate of hijackings continues to rise. In the homeowners and household insurance market, the main influencing factor is fraud. Some estimate are that six to 10 percent of short term insurance claims are fraudulent. That amounts to more than R2 billion each year.
Even though you have no control over the number of fraudulent claims, you can keep their effects from impacting your premiums. Try making the offer to your insurer to submit to a polygraph test each time you submit a claim. Many will offer a substantial savings on your premium in return for your honesty. Now, how can you overcome these factors for your own personal situation?
For car insurance, start by increasing you excess as this can lower your premium. Take this into consideration as you gather quotes. Also, be sure you can afford to pay the excess amount you choose in the event of a claim.
You need to keep a clean driving record because the more claims you have the less risk you have. If you already have an unclean driving history you can research driving courses that are offered by automobile manufactures and the Automobile Association, that can help offset negative history. This can be done by good drivers also. Most insurance companies will consider a reduction in your premium if you are able to attend and pass one of the courses.
Adding security devices can help as well. Anti-hijack devices and global tracking systems are good investments for this purpose. And, if you live in a high-crime area, consider moving. This can reduce both your car and homeowners insurance rates.
The cheapest insurance is not always the best. Be sure the policy you choose provides adequate cover for your needs at a price you can afford.Finally, shop around for the best insurance rates. But be smart.
About the Author:
Tom Martens is the syndication coordinator for Carinsurancesa.co.za. South Arica's leading car insurance portal.
