What to look for when shopping for short term insurance (household or vehicle) has always been unfamiliar territory for a lot of people, especially with the younger generation. Obviously older people have experience on their side because they would have learnt a lot of life lessons and information over the years.
One thing you should know when shopping for insurance, especially with the direct insurance companies, is to shop around. Get at least 5 quotes from various insurers. Create competition between the insurers. If you phone one insurer and they give you a premium which sounds pretty good chances are you can always get in cheaper somewhere else. Some insurers add things on to your policy that are really unnecessary while others take off vitally important things.
Always compare apples with apples. For example one insurer may add home contents insurance to your policy. They say it brings your premiums down. Well it does on your car but you then still have another premium to pay on the home contents. Some companies add car hire in the event of your car being stolen or accident damaged while others do not. Some companies charge extra for car hire and others do not. Make sure all quotes are exactly the same and include all the same things.
Another major factor that needs to be looked out for is the excess. A lot of insurance companies raise your excess to lower your premium. Yes it sounds great because you pay less monthly but how many people have R10 000 lying around when they have had an accident? Look out for insurers that say their excess is ONLY 5% or 10% of the value of your claim. Yes if you have a minor claim the excess won’t cost much, but let us say your car gets stolen or written off. Do the math. If the value of you car is say R200 000 and you have an excess of 10%, you could end up paying an excess of R20 000. Is it worth it when you can get your excess as low as R1000? When shopping for insurance check with your broker or salesman what the excess is and match the excess with all your quotes.
Remember that all insurance companies are on the market to help you. The problem comes with the staff they employ. Yes they need salesman to sell their policies but more often that not the only thing the salesman is interested in is the commission he is going to be getting out of the policy. Take control of the deal and tell the salesman what you want and not what he thinks you should have.
Also remember the cheapest insurance is not always the best insurance.