Want to learn more about vehicle insurance in South Africa? There are 5 factors that you need to understand to make informed decisions when choosing insurance for your car.
The premium you pay for your car insurance depends on the risk the insurer is taking to insure your car. There are a few key factors that insurers take into account when determining your risk profile, and these factors are compiled from statistics of comparable cases.
This includes your age, gender, background and financial position. Statistics on these areas inform the insurer how likely you are to be involved in incidents or accidents.
This is a contestable issue for many younger drivers, but insurers base risk on the driver’s experience (which means younger drivers often get higher premiums). It makes sense when looking at statistics on accidents, because the more driving experience the client has, the easier it is to anticipate potential dangers and avoid accidents. Some insurers allow young drivers to offset this issue by taking advanced driving courses to better their reaction time and understand how to avoid accidents.
The type of car and its rand value as well as general crime statistics, such as the hijackings, are all taken into account when determining risk. Certain physical attributes of a car are rated as a higher risk, for example, specific colours may be less visible on the road and can be involved in accidents more often. Expensive and exotic cars are a lot more expensive to repair or replace and may, therefore, carry a higher insurance premium. Some cars are even more likely to be targeted by criminals because these cars are in demand by hijackers or because they are easier to break into and steal.
Insurers will often require specific locks, alarm systems, tracking devices and immobilisers to insure your car. They may charge a higher premium to insure your car if you don’t have these in place. If your car is parked in a locked garage or secure complex at your home or workplace, your insurance premiums may even be lower because these measures, lower the risk of your car getting damaged or stolen.
Previous Claim History
Insurers will often ask about your previous claim history and adjust your premiums accordingly. While past incidents may not have been your fault, insurers will give you a higher premium if you have claimed before or they may raise your premium for a certain period after you’ve made a claim.
There are many ways to lower your risk profile. It is, therefore, always a good idea to discuss possible ways of lowering your premium with a broker when you are shopping around for car insurance. Sometimes, it takes a simple measure, such as installing a tracker in your car, for example, to reduce your premium. You need to ask your broker about these measures and be sure to comply with them to avoid issues when a claim needs to be made.