With the rise in inflation, the high cost of food and petrol price hikes, it’s tough just trying to get through the month. Often, insurance premiums are one of the first line items targeted when it comes to cutting back on a budget – but when finances are tight, removing your cover is an unwise place to start.
This is according to King Price’s client experience partner, Wynand van Vuuren.
"There's no doubt that insurance is seen by many as a grudge purchase. But it’s a critical tool that helps protect our homes, cars, and possessions.
"Insurance is one of the few things we buy that we hope never to need. And all those premiums can really weigh on the budget. But if your finances are under pressure right now, talk to your insurer to see what you can afford. Now is time you need insurance more than ever," says Van Vuuren.
Van Vuuren offers 5 ways you can save on insurance:
1. Talk to your insurer.
The last thing that you want to do is leave yourself exposed at a time when you can least afford it. Tell your insurer what you can afford each month, and they’ll work with you to find a way to give you as much cover as possible for your most important risks.
2. Bundle your policies.
Most insurers will give you a discount if you place all your business with them. This starts with a saving for putting more than one car on the same policy. Include your building insurance and your home contents cover, and your savings will increase further.
3. Review your current insurance.
Make sure your vehicles, buildings and home contents are covered for their current replacement value, not their market value. Being under-insured could prove to be an expensive mistake. For example, if you insure home contents worth R1 million for R500,000, you would only be paid 50% of any claim.
4. Review your excess. Your excess is the first amount payable on any claim. Generally, the higher the excess you choose, the lower the monthly premium you pay - but choose very carefully, because you still need to be able to pay the excess amount if you claim.
5. Reduce your risks.
All insurers base your premium on your risk. So, if you’re suddenly driving a lot less because you’re working from home, let your insurer know and you could see a difference in your premium. You can also lower your risk by improving your home security, for example, and parking in a garage rather than on the pavement.
Questions may be edited for brevity and clarity.
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