There’s no question about it – these are tough financial times for many South Africans, so finding ways to reduce expenses is top of mind for many households. Having insurance as a financial safety net is an important safeguard in times of uncertainty, but the cost of having the right amount of cover doesn’t need to break the bank. By applying a few smart strategies, you can ensure that you are as prepared for the unexpected as possible, while keeping your premium budget-friendly.
Providing South Africans with practical ways to save on insurance while maintaining a healthy financial outlook is Marius Kemp, Head of Personal Underwriting at leading short-term insurer, Santam. “Saving on your insurance premium doesn't have to mean cutting corners on coverage," he says. "By making informed decisions and making a few small but meaningful adjustments to your policy, you can ensure that you're well-protected while keeping costs in check. It's all about balancing smart savings with the right level of coverage for your needs."
Marius Kemp recommends these 7 tips:
Ditch the car hire
The first thing you could consider is removing car hire from your policy. This would of course mean that in the event that your vehicle needs to go in for repairs or be replaced, you would need to make your own interim transport arrangements.
Have you got more than one set of wheels in the family? Are you able to catch a cab or carpool with a friend? If the answer is “yes,” you could probably get by just fine without having car hire in your policy. Removing this add-on could reduce the cost of your monthly insurance premium.
Being safer could help you save
Not everyone can live in a security complex (although it is a big plus), but there are other ways you can save on home insurance premiums. Now is your chance to think about other safety measures you can put in place to protect your property and serve as a deterrent for criminals.
Installing or enhancing your home’s safety features could lower your home insurance premium. Think burglar bars, security gates, electric fences or a linked alarm system.
Driving less? Your car insurance should cost you less.
Since the end of lockdown, many South Africans now work from home more and spend less time on the road. The good news is that with the right insurer, driving less can help you save big.
All risk items may not be a need right now
Insurance is a dynamic product that should change as your circumstances and your needs evolve. For example, if your lifestyle has changed and you are no longer socialising out and about as much as you used to, you’re probably also not wearing your expensive jewellery outside of the house that often.
Perhaps you’re not travelling as much as you once did and aren’t leaving the house with your photography equipment. You may even be working from home now, rather than travelling around with your laptop.
If this is the case, you could consider removing specified all risk items from your policy as they will already be covered under your home contents policy. This could save you some money on your insurance premium.
Bundling could get you a better deal
“While there are many smaller insurance providers that only offer niche products, such as only vehicle, insuring with a larger company that can meet all your insurance needs is a good idea.
For one, it helps simplify the insurance process but also by insuring your car and home contents with the same insurance provider, you could qualify for a discount. Speak to your advisor or intermediary about bundling your policies to get a good deal,” says Kemp.
Consider voluntary excess
Another way to reduce your premium could be to choose voluntary excess if you have comprehensive vehicle insurance. Your insurance excess is the amount of money you are required to pay when you claim from your insurer. The greater your excess is, the lower your premium.
Most often, this includes a compulsory and voluntary amount. If you have extra cash at hand, you could increase your voluntary excess. This would mean paying more out of your pocket in the event of a claim, so you’d need to make sure you can afford the higher excess amount if needed.
By doing this, you would essentially be shifting more risk from the insurer to yourself but will receive a lower monthly premium as your insurer will be saved from paying out minor claims.
Make a temporary switch to limited cover
Although having comprehensive car insurance cover is the most ideal scenario for absolute peace of mind, the reality is that right now, the cost may be out of reach for some car owners. To get around this; if your car is not subject to a hire purchase agreement, you could consider taking out third-party insurance cover instead.
“Replacing your own car can be pricey but having to replace someone else’s luxury car after an accident can be expensive in the long run. With third-party car insurance cover, you’ll pay less and remain covered if the need to claim arises.
This could be a temporary fix and when your financial situation improves, nothing stops you from upgrading your policy to comprehensive cover – with Santam, we offer the degree of flexibility you need to tailor your policy to your needs as your circumstances change,” says Kemp
PERSONAL FINANCE