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Recently the minister of safety and security made known the latest crime statistics. These statistics showed that vehicle hijackings have increased dramatically. It is easy to conclude from this that these figures must, at some point, impact on vehicle insurance. What we also don’t realise is how much vehicle accidents have increased over the last year and the effect this will have on our insurance premiums in the months to come.
Some research into the different insurance companies shows that the number of vehicle accidents has increased dramatically and strangely enough more so in the last couple of cold winter weeks. Apparently, according to one assessor, drivers tend to put the heaters in their cars on which leads to drowsiness, this in turn leads to slower reaction times and hence an increase in accidents. Another reason is the frosted windows of vehicles left outside during the cold nights. Drivers tend to drive without cleaning the rear window and bam, into the gate or pillar they reverse.
Over the last couple of years the cost of repairs have also increased dramatically and over the last year insurers have seen the average cost of a claim double, due to the costs of parts, shooting through the roof. An increase in vehicle theft, accidents and rising repair costs forces insurance companies to recalculate the risk and cost of insuring our vehicles.
This led me to think, “What can we do to minimize our vehicle insurance premiums and what should we be looking out for when insuring our precious dream car.”
Insurance companies tend to like tracking devices and gives substantial discounts on vehicle insurance premiums if your vehicle is fitted with one. The discount on your premium will more than cover the monthly fee for the tracking device, especially if your vehicle’s value is over R200 000. The added benefit is that many insurers are willing to waive the excess in case of a claim if you have a tracking device. Another added benefit of a tracking device, as mentioned by some of our clients, is that family members can be located in times of emergency.
Another important tip is to make sure your insurance company adjusts the insured value of your vehicle from year to year. Cars tend to lose value (now I understand my wife's point why cars are not an investment) and the book value is what the insurance company will pay out in case of a claim, nothing more. If you pay premiums based on the initial purchasing price, but the second hand value is worth less, the discounted value will be paid out. There is therefore no reason why you should insure your car for more that this value. Phone your insurance broker and ensure that the value is adjusted. This will reduce your premium.
Some insurance companies give discount if your vehicle is kept in a garage during the night. This however is not a general practice and you should ask your broker or insurance company what there policy is in this regard.
Insurance companies do not like to insure vehicles only. There is a substantial difference in the insurance premium you will pay if you have all your insurance at one company. Do not insure your vehicle at one insurance company, your caravan at another and your household content at yet another. By consolidating all your insurance at one insurer you will save on your monthly insurance premiums. This is one case where it pays to keep all your eggs in one basket.
To the dad’s out there make sure what your insurance company’s policy is with regards to nominated drivers. If your student son or daughter’s car is included in your insurance policy ensure that your insurance company does not have a policy restricting the driver of the vehicle registered in your name. Although your kid saves on premiums, or should I say: “Dad saves on the premiums”, future claims may be rejected if the insurance company restricted the drivers of that specific vehicle.
I suppose the most obvious way of saving on vehicle insurance is by driving a cheaper car. The fact is the older the car, the cheaper the car, the lower the premium. No wonder some of the financial coaches will tell you the cheapest car to drive per kilometer is the oldest one. As if we car lovers will believe them!
Till next time keep your eyes on the road, your cash in your pocket and drive safely.
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