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How to cut insurance premiums

06 May 2008 Brigitte Taim

HOW TO CUT INSURANCE PREMIUMS

Most people resent paying insurance premiums, but there are a few ways to make your premiums less of a burden on your pocket.

Edward Gibbens, Executive Head of Broker Distribution at Santam says many policyholders are unaware of how small adjustments to their lives, like installing a tracking system in their vehicle or a security gate at their home, can have on their premiums.

“Always remember to speak to your broker if you take any protective measures in your home or with any of your possessions outside of the home. These measures will all contribute to saving you money on your premiums.

Here are a few tips to help reduce your premiums:

·          Reduced cover – the value of a vehicle depreciates over time. You can therefore adjust the insured value of your vehicle every year and reduce premiums. Vehicles are insured at market value, whereas house contents are insured for their replacement value. If your vehicle is old and not worth much then it is best to opt for fire, accident and third-party cover only.

·          Improved security – you should call your broker or your insurer whenever you take any new security precautions, whether it be installing a gear lock, linking your security system up to an alarm company or installing a security gate. These, among others, can all help to reduce your premiums.

·          Voluntary excess – you can voluntarily opt to pay a larger excess when you claim which can help in keeping your premiums down. You should only consider this if you are able to afford paying the higher excess.

·          Never submit unnecessary claims – premiums are directly proportional to claims. When you claim, your no-claim bonus generally falls away and your premium goes up. If you can afford it, rather cover relatively small losses out of your own pocket and avoid premium increases. Ensure you are aware of what the excess is before you make a claim.

·          Never provide false information – it is illegal. If for example you pretend that you had a gear lock installed when you actually did not, you leave yourself open to being charged with committing fraud. Fraudsters generally become uninsurable.

Gibbens adds that one should always beware of being under insured.

“Update your policy at least once a year to make sure all house contents and car accessories are fully insured at replacement value.

“Before making any changes to your policy speak to your broker first to understand how it will impact on future claims”, says Gibbens.

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