Annual motor valuation may reduce insurance premiums

any consumers may unknowingly be paying more than they should for their motor vehicle insurance - often one of their biggest short-term insurance payments - due to a failure to assess the value of their motor vehicle when it comes time for annual motor in

This is according to Christelle Fourie, Managing Director of MUA Insurance Acceptances, who says unless otherwise instructed, some insurnace companies will continue to charge the same premiums for the original value of the motor vehicle even though it is a few years older and has far more millage on the clock. “By conducting a yearly valuation of the motor vehicle before renewing the insurance policy, consumers could in fact save money on their motor insurance.”

“It is a well known fact that every year the value of a vehicle depreciates. For example, the original purchase price of a 2009 model BMW 320i was around R315500, but in 2012 the value of the vehicle would have depreciated to an approximate market value of around R245900. As a result, the insured should update the value of the vehicle with their insurer as they could end up saving as much as 20% on the premiumjust three years down the line.”

Fourie says in addition to conducting yearly valuations there are other ways consumers can also reduce motor insurance premiums. “Currently, South Africa is experiencing a consumers market, which means most insurance companies and their brokers are open to negotiation. If consumers are looking for additional ways to reduce their monthly premiums, they should consider asking their insurance provider whether they can pay a higher excess for lower monthly fees.”

However, Fourie notes that any consumer who does opt to increase their excess should first speak to their broker to consider whether they will have sufficient funds to pay a higher fee if they are involved in an accident.

She says another way for consumers to possibly reduce insurance premiums is to incorporate some form of vehicle tracking technology. “Insurers often charge lower premiums for those vehicles with a tracking technology, including Microdot Technology, as the car falls into a lower risk bracket as it will be easier to recover should it be lost, stolen or hijacked. Similarly, drivers who fit alarms or immobilisers to their vehicles could also benefit from lower premiums.”

“Some insurers also offer reduced premiums for drivers who attend advanced driving courses because this improves the driving skills of the policyholder and reduces the likelihood they will be involved in an accident.”

Fourie says ensuring the motor vehicle is parked in a secure location is another useful way to reduce insurance premiums. “Vehicles stored in a locked garage with additional security measures, such as an electric gate or electric fencing, again present a lower risk.”

“Each insurer’s premium is usually dictated by the underwriters risk assessment of the insured’s particular risk bracket and while consumers cannot always change certain factors that may determine premiums - including age, gender, and driving history - there is often room for negotiation, so it is best to consult directly with a broker on how best to reduce motor insurance premiums,” concludes Fourie.