Dear Red Monkey,
I’m paying so much for my motor vehicle insurance that it’s eating up a big chunk of my monthly budget. I’ve got two vehicles insured, and the premiums have become excessive. What can I do to reduce this cost?
Signed, Overwhelmed by Premiums
Dear Overwhelmed by Premiums,
You’re certainly not alone in this situation. Many people, especially in South Africa, are facing the same challenge of spiraling vehicle insurance costs. The good news is that there are ways to bring your premiums down without leaving yourself exposed.
Let’s start by understanding why insurance is so essential. In South Africa, a country where many drivers don’t have insurance, an accident can turn into a serious financial hit. If you find yourself involved in a collision, even a minor one, and you’re not insured, you could be liable for massive repair bills or replacing the vehicle entirely. That’s why it’s not an option to go without.
Here’s what you can do to drastically reduce your motor vehicle insurance costs:
1. Get Multiple Quotes: Start by comparing quotes from various insurers. It may seem obvious, but many people stick with the same provider year after year without checking if they can get a better deal elsewhere. You’d be surprised how much you can save by switching insurers, while keeping the same level of cover.
2. Adjust Your Excess: You could opt to increase the voluntary excess on your policy. By agreeing to pay a higher amount upfront if you need to make a claim, insurers often lower the monthly premium. Just be careful not to raise it too high—make sure you can afford the excess if something happens.
3. Bundle Policies: Many insurers offer discounts if you combine vehicle insurance with other types of coverage, such as home insurance. Check with your provider to see if bundling is an option that could lead to cost savings.
4. Reassess Your Coverage: If both vehicles are fully insured, do you still need comprehensive coverage for each? Depending on the age or value of the vehicles, you could switch to third-party, fire, and theft coverage for one of them, which tends to be much cheaper than comprehensive insurance.
5. Mileage and Use: Let your insurer know if you are driving less. Since the pandemic, many people are using their vehicles less frequently. Some insurers may reduce your premium if your vehicle is mostly parked in the garage.
In South Africa, many consumers are trying to find ways to manage rising insurance premiums. Factors like increasing repair costs and inflation contribute to this hike. In other countries like the US and UK, premiums have also been climbing due to higher repair costs, supply chain disruptions, and expensive vehicle technology. But the core idea remains: shop around, adjust your coverage, and don’t be afraid to negotiate with your insurer.
Stay insured, but don’t pay more than you have to.
Best of luck!
The Red Monkey
