If you’ve insured your car, boat, or other vehicle, the chances are that you can get more from your insurance. Here's the top four ways how:
Your insurance excess is the amount you pay before your insurance kicks in. Choosing an excess that isn’t right for you can be a big mistake. Generally, car insurance companies will reduce your premiums (the annual or monthly payments you make for insurance) as you increase your excess amount.
Having a higher excess has several benefits. The key one for most people is to lower your regular premiums. A higher excess means you are less inclined to make a claim – as the costs you must cover before your insurance kicks in may mean it is not worth claiming. By lodging fewer claims, you will reduce future insurance premiums and increase your insurability down the track. This is especially important for younger people who may not have many insurable assets (such as property), and therefore do not have a lot of coverage. Your history under your car insurance policy can affect the pricing you are offered on other insurance policies – when insurance companies calculate your premiums on new policies, they will consider your claims history under all other policies you have. This means that if you have claimed several times under your car insurance, your home, contents, or life insurance can be more expensive. Therefore, by having a higher excess and claiming less on your car insurance, you will be reducing your future insurance costs across a range of areas.
It also pays to consider increasing your excess as you get older. With age, your disposable income should increase, and you should become more willing and able to cover incidental costs associated with vehicle ownership. Doubling your excess amount can reduce your premium by 15-30%. Remember – insurance is about getting coverage that suits your needs – so it makes sense to alter your car insurance as your requirements change.
Despite the comments above, take care when you select your excess amount. If you set it too high, in the event of an accident your excess may be beyond your means. Therefore, it’s important to set an excess that you can afford.
Premiums are a very important factor when considering what policy you should buy. Premiums are the cost of the insurance policy – therefore, it is important to make sure that the policy not only covers your requirements but is also within your means. Purchasing a policy with the lowest premium can be a mistake, so remember that you are buying insurance for the benefits – as is often the case in many areas, you get what you pay for.
When comparing premiums, make sure you are comparing like for like policies. For instance, there is no point in comparing the cost of third-party car insurance with a full coverage policy. A handy tip to minimise your premium is to re-evaluate the amount your vehicle is insured for every couple of years. Vehicles depreciate (drop in value) over time, and it usually doesn’t make sense to insure your vehicle for the amount it was worth ten years ago!
(Learn more about other ways you might be wasting money on insurance).
Shopping without preparation can be a big mistake, as you’ll waste time and often purchase a policy that doesn’t meet your requirements. You should be able to answer the following questions before you start looking for car insurance:
If you are unable to answer these questions, consider having a chat with a specialist in this area.
When shopping around, also note that:
If you have children of driving age, some simple steps can help keep them safe whilst also reducing your insurance premiums. Consider enrolling them in a defensive driving course. Not only does this improve their driving capabilities, completion of the course can sometimes get you discounts on their car insurance. Completing the defensive driving course also means young drivers can sit their licence tests sooner. This can also reduce premiums as insurance companies often consider fully licensed drivers less risky.
Let’s recap the top ways to make the most of your car insurance: