We all want to get the most value possible from our insurance. We to try to make sure that we get the right insurance cover for our needs while keeping our monthly premiums as affordable as possible.
We need to find that sweet spot between paying too much and being over-insured, and not covering ourselves adequately. One approach to making your premiums as cost-effective as possible is to evaluate your current circumstances in more detail to see if you can make changes to your insurance schedule that will save you money on premiums without compromising on your insurance cover.
Here are some suggestions.
Look at your insurance risk factors and adapt accordingly
Insurance is about risk. Your insurance premiums are calculated based on the value of the insurance cover you require linked to a risk profile that is generated for you.
It is important that you accurately answer all the questions you are asked so that your risk profile can be determined.
One of the ways that you can reduce your premiums is to reduce your risk profile. There are a few ways of doing it, most of which do unfortunately involve spending a bit of money, but this will be offset by the money you save on your premiums over the long term.
- Install extra security measures
This reduces the risk of your home being targeted by burglars, and makes it more difficult for them to gain entry. Insurers in the major centres in South Africa will usually insist on certain basic security measures in order to provide cover, like burglar bars or an alarm system linked to an armed response company. Consequently, the better your security measures, the lower your risk and the lower your premiums. So, for example, if you have a burglar alarm, take out an additional contract that will link it to 24-hour armed response. Or you could install laser beams across your property.
- Install smoke alarms
These will provide an early warning system should a fire break out in your home, allowing emergency response to commence quicker and will reduce the risk of fire damage that you would need to claim for. Many security systems provide you with the option of smoke detectors linked to your alarm system.
- Increase your excess
This is a tricky one, and you should try as best you can to work out how likely you are to suffer a loss before you decide on whether or not to increase your excess. The benefit is that your premiums will come down. The potential drawback is that you may end up with an excess that you can’t afford at the particular time that you claim, leaving you unable to replace your asset or repair your car. One way to compensate for this is to put the money you save on premiums into an emergency bank account that you can access when you need to pay an excess.
- Only claim if you have to
Insurance companies usually take your claims history into account when setting your premiums. You can keep your claims history clean – and your premiums down – by not claiming if you lose smaller items that you can afford to replace without an insurance payout. This will preserve your no-claims record and ensure that your premiums remain affordable.
Research thoroughly
The last tip we’d like to leave you with is to do as much homework as you can. Not all insurance packages are the same, and there are specialist niche insurers who will discount your premiums under certain circumstances and for certain affinity groups.
Remember that you always have options. Don’t simply accept the cheapest quote to save on premiums if you’re not entirely comfortable that you will be adequately covered. It may well be worth paying a little extra every month for a lot more peace of mind.
Go online and explore what we can offer you at www.infinitionline.com.