2020 has been a tough year and many people are looking for ways to decrease their expenses. Many have considered it, and some have already cancelled their car insurance to ease the financial burden. Canceling car insurance altogether, could be a costly mistake that could expose individuals to serious financial and legal consequences.
“Having insurance on your car is vital – it protects you against the financial risk associated with hijacking, theft and accidents. In South Africa, if your vehicle is under finance, you are legally required to have comprehensive car insurance,” according to Marius Neethling, a personal lines underwriting manager at Santam. “Whether you’ve just purchased your vehicle or have had it for a while, it is extremely important to have the right insurance policy for your needs. It’s also a good idea to speak to your broker about ways in which you can reduce your premiums and make insurance work for you.”
Neethling provides five tips that you as an adviser can discuss with your client:
|1.|| Insure all assets with one company
While there are many smaller insurance providers that only offer niche products, such as only vehicle or personal lines insurance, insuring with a larger company that can meet all insurance needs is a good idea. For one, it helps simplify the insurance process but it’s also a great way to get a discount.
|2.||Install a tracking device
While not all financial institutions who finance cars require tracking devices to be installed, clients may need to do so if they drive a high-theft-risk vehicle or the value of the vehicle is extremely high. Even if the car does not fall into these two categories, installing a tracker may get the premium reduced. Obviously, one needs to compare the saving in premium to the cost of the tracking service.
|3.||Review cover on a regular basis
Reviewing insurance each year offers the client the opportunity to keep track of their policy and coverage. Since the vehicle is a depreciating asset (unless it’s vintage or a collectable), the value of the car will be adjusted every year so it’s important to check that the client is still adequately insured. Which leads to the next point…
|4.||Revise your excess
The insurance excess is the amount of money the client is required to pay when he or she claims from the insurer. Most often, this includes a compulsory and voluntary amount. If the client has extra cash at hand, they can increase their voluntary excess. By doing this, more risk is shifted from the insurer to the client and a lower monthly premium will be possible as the insurer will be saved from paying out minor claims.
|5.|| Cash in on ‘good behaviour’ discounts
Many insurance companies offer discounts or cash back when a client has been insured for a long period of time and don’t claim or take actions that are deemed as ‘good behaviour’. “Santam, for example, has introduced SmartPark, which rewards you with up to 20% off your premiums for driving less. This distance-based insurance benefit was developed in response to clients’ changing environment and an increased demand for more innovative solutions to help manage personal finances during these uncertain times. It’s a win-win if you’re currently working from home during the pandemic,” Neethling explains.
Click here to download the Santam media release and share the tips with your clients.