6 factors that impact your car insurance in South Africa
So you’ve bought a new car – congratulations! Now you want to insure it, but you’re finding the information a little confusing and overwhelming. How is your premium calculated? Why do younger drivers have to pay more? And what difference does it make where your car is parked? All of these factors, and more, influence how your monthly car-insurance premium is calculated. Let us give you the low-down on the how and why.
01. Who are you? And what’s your track record?
Your age, gender, where you live and credit history all play a part in determining your monthly car insurance premium. Why? Research over many years has shown that these factors are important when insuring a driver.
If you’ve recently learnt to drive, you have less experience and are more likely to be involved in an accident – it’s nothing personal, you’re just new at this. As you become a more experienced driver, this factor will become less important. Where you live is taken into account because certain neighbourhoods have higher instances of crime, while your credit history tells insurers how risky it will be to insure you – in other words, do you pay your bills on time? If you do, you might be offered a better premium. It’s very important to provide accurate information when insuring your car, or you run the risk of your claim being refused. Honesty is always the best policy!
Provide accurate information when insuring your car, or you run the risk of your claim being refused.
02. What car do you drive?
If you’ve cashed in your chips and bought your dream car, you may have to pay a bit more to make sure it’s protected in case you have an accident or it’s stolen. Unfortunately the more expensive your car, the more costly it is to repair or replace – it’s that simple!
However, some cars are stolen more easily and more often, so if you’ve got one of these, you may also have to pay a slightly higher premium to make sure it’s kept safe and sound. On that note, if you’re interested to know which cars have the lowest insurance costs, have a read of our blog: What are the cheapest cars to insure in South Africa
Some cars are stolen more easily and more often, so if you’ve got one of these, you may pay a slightly higher premium
03. Who’s the driver?
The person who drives the car most often is also important. Is the car being driven by your teenager who recently got their licence, or are you mainly using it to drive to and from work and to do errands on the weekend? These two scenarios are very different in
the insurance world. As mentioned above, younger, inexperienced drivers will mean a higher premium, while older, more streetwise drivers will pay less because they know how to handle themselves on the road and are less likely to be involved in an accident. Sorry kids, but your time will come!
04. Safety first
The more you do to protect your car against theft, the less you’ll probably pay for car insurance. If your car is relatively new, it probably comes with an alarm and an immobiliser, which makes it more difficult to steal. This is a good thing – it may reduce your insurance premium.
If your car is a little older, having an alarm, immobiliser or tracking device fitted could be worthwhile in the long term as it may mean you’ll pay slightly less to insure it. Where your car is parked overnight will also make a difference to your premium – if it’s inside a locked garage behind a gate, you may pay less than if it’s parked outside on the street.
The more you do to protect your car against theft, the less you’ll probably pay for car insurance.
05. The effect of inflation
While the value of your car goes down every year, the cost of repairing or replacing it doesn’t. So while it’s important to adjust your car’s value with your insurer annually to make sure you aren’t paying too much, the insurer’s costs are probably increasing. This is something to keep in mind when insuring your car. If you want to keep your premium low, you might decide to choose a higher excess, too.
06. Insurance types
You can choose how you want to insure your car: do you want to go for the fully comprehensive option, or something more basic? If you go for the first option, you can expect to pay more than if you choose third-party, fire and theft insurance, or third party only.
The comprehensive option gives you more cover, while the others give you less, with third-party cover being the cheapest. This means that if you’re involved in an accident that you’re responsible for, your policy will cover the other driver’s damages, but not your own. The type of policy you choose will determine how much you pay every month.
If you want to see how your current car insurance premium compares, why not get a host of new quotes using BetterCompare’s online comparison tool now?
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