As motorists still grapple with the excessive price of fuel, the Reserve Bank in its statement of the Monetary Policy Committee last week said it expects fuel price inflation to increase in the near term.
The cost of car insurance is also likely to continue increasing due to the high risks faced by motorists on the roads, putting more financial pressure on consumers. South Africa has experienced an increase of 6.5% in the number of car thefts and hijackings in the third quarter of 2023/2024, according to the latest crime statistics from the South African Police Service.
“Insurance remains a grudge purchase to protect you in an unforeseen event in which you cannot afford to replace your assets. The Stats SA February Consumer Price Index indicated that Premiums for all types of insurance have increased by 9.5% over the past year,” says Yulanda Paterson, GM Specialist Division at Infiniti Insurance & Infiniti Online. “But if you are worried about the increasing cost of car insurance, you might be surprised at how some simple changes can significantly reduce your premiums,” Paterson adds.
She says a number of factors determine the cost of car insurance such as a client’s gender, driving history, cost of the vehicle, and distance travelled. However, Paterson explains that there are economic variables such as inflation, the cost of auto spare parts, and the geopolitical landscape that can affect the supply chain in the market. Furthermore, technological advancements such as electromagnetic or ultrasonic sensors are making even the simplest body parts, like a bumper expensive to replace.
Steps you can take to reduce your car insurance premiums:
Consolidate your policies
If you have more than one car in the family and have different policies with various car insurers, you will pay more insurance premiums than when you consolidate them into one policy with one insurer. You can also get significant savings by including your cars under the same policy as your household contents. Consolidating your policies will also ensure that all your cars have the same level of coverage and that you can receive benefits such as loyalty discounts.
Downgrade to an entry-level car
The make, model, and value of your car significantly impact your insurance premiums. For example, if you own a top-of-the-range luxury SUV, you must expect to pay higher premiums than a smaller lower-cost entry-level car because the sum insured is simply much higher. Consider that an expensive car will cost more to repair or replace if damaged. Furthermore, luxury and high-speed cars tend to attract car thieves. Additionally, if your favourite car has a powerful engine, insurers may see you as more likely to be involved in an accident.
Paterson advises clients that when shopping for a car, they must consider the make and model of the car they buy because some cars are cheaper to insure than others. “Clients must also keep in mind that insurers look at the risks associated with certain car models, the costs of repair, the safety features of the car, and the number of claims made for similar models in the past.
It is important to request quotes to insure your car before you make a final decision on what car you are going to buy as the cost of insurance needs to be factored into your monthly budget.”
Increase your excess amount
It is also critical to regularly review your excess amount because a higher excess amount can lead to a lower premium. By choosing a higher excess amount, you are absorbing more of the repair or replacement cost in the event of a claim, making it less likely that you will lodge claims for minor repairs that are not significantly higher than your excess amount. This approach can help you save on your insurance costs while providing coverage for more significant risks.
Drop some extra benefits that are not essential to you
You might need to drop comprehensive cover if you drive an older car. You might only need some of the extra benefits in a policy, such as roadside assistance and car rental coverage. Consult your broker and review your insurance policy together word by word and ask about removing anything you might not need to cut down the premium.
At Infiniti Insurance, while the foundation of our business model is based on building strategic business partnerships with our professional team of brokers, however our online platform, Infiniti Online, provides full support and advice to clients as you place your own personal and small commercial insurance policies and make changes as and when you need to.
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