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Tips for getting best price for your insurance product

‘Review your policies at least once a year’
‘Review your policies at least once a year’
Image: 123RF

I’ve been a car owner for over 10 years and have only changed my car insurance three times but it’s only recently that I became aware of the importance of negotiating for lower premiums. 

The first insurance came with the purchase of my first car.

It was a fairly unknown company and the high premiums made me switch to another insurer. Their promise of a monthly “cash back” one is supposed to earn for being a good driver is what sold them to me.

To cut a long story short, I eventually left them after being a “good” driver for more than two years without getting a cent from their cash-back promise.

I’ve been with Momentum since 2018 and they have been good to me and even paid me out without any hassles when I wrote off my previous car in 2019.

However, what I noted while looking at my old bank account statement was a steady increase of my premiums over the years.

My understanding is that the insurance premium is supposed to decrease as the car ages.

I live in a fairly safe suburb, the car is in a secured parking spot and I consider myself a very low-risk driver. 

I never received any clear explanation why premium had gone from about R1,500 in 2020 to R2,300 in 2023.

With the cost of living climbing through the roof, I had to go to Momentum and renegotiate my premium.

I didn’t know what to expect but I know a lot of people who have taken this path with positive outcomes.

“The insurance company will always negotiate in order to keep you,” a friend would urge me. 

The process took over two days with back and forth emails and telephone calls.

The agent was friendly and understood my reasons for wanting to reduce my premiums.

We eventually settled on R1,600, with a saving of R800, which can go a long way considering the ever-rising price of fuel and food. 

There are some ways that you might be able to reduce your premiums without reducing the quality of your insurance cover or making too many compromises.

In today’s digital world there’s more transparency about costs and service, helping you to get the best deal.

Ernest North, co-founder of Naked, the fully digital insurance platform, offers some tips for getting the best price for an insurance product that suits your needs.

  • Do your research and read reviews: Do some research about the various insurance providers before deciding which ones to get quotes from. You can read reviews on Google, Hellopeter and Facebook to see how happy their customers are and whether they feel like they’re getting good value for money for their premium.
  • Get multiple quotes: Ask at least two or three credible insurance providers for quotes. Make sure to use the same ID number and personal details for all quotes. Not all insurers have the same terms and conditions or offer the same benefits. Be sure to check and compare the following details so you can understand what you’re getting for your money – the excess: are you being quoted on a single flat amount or a percentage of the size of the claim, the value your car is insured for (retail value, market value or trade-in value), waiting periods and benefits such as car hire or 24/7 emergency assistance. A pro-tip is to go digital. Digital insurance platforms will let you see the final premium upfront without speaking to or needing to negotiate with a call centre. You’ll get a final quote online in 90 seconds and be able to buy on the spot.
  • Experiment with your excess:  A lower excess means a higher premium, and higher excess means a lower premium. Look for the right balance between what you’re willing and able to pay if you need to claim and what you can afford to pay monthly in premiums. However, watch out for additional excesses that add extra costs when you claim. For example, you might need to pay an additional excess if the accident happened after 10pm, the driver is younger than 25 or your policy is less than a couple of months old. A combination of excess charges could add up to tens of thousands rand more in costs if you have an accident.
  • Reduce your risk to save on premiums: There are a few easy ways to reduce your risks and in so doing, reduce your chance of claiming and ultimately keeping your premiums low – always park your car in a safe space and make sure it is locked, install burglar bars and an alarm at home and put a screen protector on a phone and keep it in a sturdy case. It’s also advisable to avoid claiming for small losses like someone stealing clothes off your washing line or small dents and scratches to your car. The more you claim, the higher your premium will be.
  • Consider bundling home and car cover: It can save you some admin and sometimes some money to get your car, building and home contents insurance from one provider.
  • Look for flexibility: Life is all about change. You work from home and only really use one car. You buy a new smartphone or computer. You move homes. You want a policy that makes it easy to change your address, cover a new car or update the sum insured of your contents. These days, it’s something you really want to be able to do online. At times that you’re not driving as much as you usually do, you should ideally be able to pay a little less for insurance.
  • Review your policy regularly to get the best deals: Review your policies at least once a year to ensure that your cover is still right for you. It’s a good idea to increase the value for which your home and contents are covered to keep up with inflation and insure new things you’ve bought. Also, make a habit of getting alternative quotes when your insurer renews your policy and increases your premium.

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