Don’t we all love a bargain? Who wouldn’t want to save money on insurance? Lower premiums equals more money to spend on other interests. However, switching Insurers purely on lower cost alone, is not advisable and may (likely will) cost you much more in the long run. Where a cheap option may save you in the short, it only takes one claim that is limited or excluded to totally obliterate any savings.
A real example of this was a client that chose a policy that saved him R300 per month but with no value ads, no extensions to covers. The first month on the new policy he had a claim that cost him R15 000 out his pocket because this was not insured with his new ‘cheap’ policy. This one loss cost him 3.5 years of the premium he saved – gone AND if he wants to go back to the better cover for future claims, the premium is more so it’s a double strike to the pocket.
One needs to seek the advice of an independent broker, to get advice and quotes from multiple leading, tried-and-tested insurers so that you get the best premium to cover option. The best value for money – which is different to “Cheapest”.
Does my new policy provide the same or better cover than my old policy?
To reduce cover, reduce insured values, increase excesses and remove extensions you can easily lower your insurance costs. However, you do so at your own risk. When talking to a Broker, they should take on the mandate to find you the same cover (at worst) or rather to better your cover whilst finding better premiums. Sometimes, a good outcome is paying the same premium but finding more coverage in return for it. You will only find these options and outcomes if you do your insurance through a qualified Insurance Broker. This will never be the case if you insure Direct.
What is excluded and what are my Excesses?
You must also check your excesses and read your policy exclusions. Some insurers (whom we cannot name) that are Direct, exclude Fire and Explosion on a “Comprehensive” vehicle cover. Some do not cover your liability for Third Party damages if you have a collision in a parking lot at a mall for instance. This is actually NOT RIGHT and an abuse of consumers lack of understanding of the policy wording. Again, an Insurance Broker will hold your best interests at heart and take you through these things… if they don’t, you just haven’t got the right Broker yet.
The same goes for excesses which are payable by yourself in the event of a claim. An acceptable market excess is between R2 500 and R5 000. Be sure to check your excesses because a very low premium can often be linked to a very high excess with some Direct insurers providing options as high as R25 000 per claim… and even most wealthy individuals don’t have that laying ready to pay after a loss occurs.
We can help you find the Best Policy
Choosing a new insurance policy based purely on cost alone may end up costing you more. Finesse Insurance Brokers can help you weigh the pros and cons when you’re considering a change in Insurance Providers. We don’t work for one particular company, we work for you, the client and we deal with SA’s leading insurers which means we can source the most suitable options for your needs.
If you don’t have a Broker, contact us today.
If you do have a Broker but never hear from them, contact us today.
