During these economically challenging times in South Africa, it’s not easy for some households. Although your current car insurance may be expensive, remember that every car insurance company could calculate car insurance premiums differently1. Below are general factors that could affect a car insurance policy’s premium1.
Factors that we can control
We can’t control a factor such as young age that can raise a car insurance premium1. But we can manage to pay premiums on time, maintain a good driver profile, and search for more affordable car insurance1.
What are some factors that make car insurance expensive? Of course, every insurer is different, and the article covers only general aspects. So, please contact car insurance companies directly about how they price their car insurance with your unique profile. Nevertheless, here are some possible reasons for high car insurance premiums.
Young age
To the insurer, the greater the risk, the higher the premium1. Young drivers, ranging from teenagers to those in their twenties, will have little driving experience1. They are, on average, riskier to insure for car insurance companies in South Africa compared to motorists in their thirties and older1. Young drivers still need to develop a good driver profile, which will lessen the risk to the insurer1. But a person in his thirties driving for the first time may fall into the same group as the youngsters1.
Your gender
In South Africa, insurers may charge higher premiums for young men than young women1. By the time these men reach the age of 30, this extra premium largely disappears1. This calculation uses driver profiles, with young males posing a greater risk to the insurer1.
What about singles and those married?
Most car insurers in the USA charge a lower premium for married men than those who are single, separated, divorced, or widowed1, the same might be said about South Africa.
Your education
Drivers with college or university degrees generally pay lower premiums1. In addition, insurers have found that highly educated drivers submit fewer claims1.
Where do you live?
Risk affects premiums1. So, if you live in a lousy neighbourhood known for its criminal activity, you may have to pay a higher premium1. In addition, a province with a higher criminal activity or accident rate could also raise premiums1.
What job do you have?
A sales representative who averages 40 000 km per month will likely pay a higher premium than a retired person who travels two blocks weekly1. This is because the sales representative is more likely to have an accident1.
Your driver profile
A reckless driver who has caused many car accidents will have to pay a higher premium than someone who has an excellent profile due to defensive driving1. That is why it is so important to drive carefully because the less risk you are to an insurer, the lower your premium can be1.
Disclaimer
Car insurance is complicated, which means this article can only provide information. First consult a certified financial advisor for professional advice before buying car insurance.
Saving on car insurance premiums through safe driving is one thing, but sometimes you may have an accident regardless. So, it’s crucial to protect your car and yourself by securing the right cover. If you buy a new car using bank funding, by law, you must purchase comprehensive car insurance.
PMD can assist you with their affordable car insurance with fixed premiums* and excess that reduces to zero* T’s and C’s apply.
Source:
1https://www.nerdwallet.com/article/insurance/what-affects-car-insurance-rates
Disclaimer:
This article was prepared by Eric Sandmann in his personal capacity. The views and opinions expressed in this article are the author’s own and do not reflect the views and opinions of Prime Meridian Direct (Pty) Ltd, FSP41040 (car insurance and life cover products). The views and opinions in the article should not be attributed to anyone but the author unless expressly stated. Nothing in this article should be relied upon as advice, this publication is presented for informational purposes only. No person should act or refrain from acting in reliance on any information found in this article, without first obtaining proper financial advice from the appropriate professional. The author makes no claims, promises or guarantees about the accuracy, or completeness, of any information linked from, referred to, or contained in this article. The author reserves the right, to edit and change the content of this article.
