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There’s something any driver in South Africa intends to find when buying car insurance. Besides having a good cover, we want to pay a low premium. Different from what everybody thinks, it’s not impossible to get a good cover for a cheap price. However, accomplishing this involves understanding perfectly how car insurance premiums works. In this article, we aim to assist you on this little but important detail to guide you get the greatest vehicle insurance cover.

What is Premium in Car insurance?

Car insurance has some specific terms entirely related to this type of service. This might cause some people feel a little confused when reading their vehicle insurance policy. As you are going to pay for a protection service, it’s important you understand everything involved in it. Having said that, we want to stop to explain what is it called Premium on car insurance. The simplest definition of premium is the cost you have to pay, usually on monthly basis, for the car insurance product you buy. It refers only to the amount of money you will have to pay in order to drive your vehicle with a company back up. As this is just a simple way of explain what is premium on car insurance, we ought to delve deeply into it to expand on details that will help you get the greatest motor vehicle insurance. Read along to get ready to buy car insurance.

What details can affect car insurance Premiums?  

There are a considerable number of factors influencing your car insurance premium. Apart from the type of vehicle you drive -pick up, truck, family car-, your gender, for example, is one special factor car insurance companies takes into account when evaluating the risks. Another important factor on premiums is age as, young inexperienced drivers are considered to poss higher risk when driving, insurers tend to offer higher quotes when referring to car insurance for young drivers.

Can I change my car insurance premium after getting the quote?  

Along the process to purchase vehicle insurance, there are a number of steps any driver must follow:

  • First, go over the many types of car insurance covers.

  • Second, ask different insurers for a quote based on the vehicle.

  • Third, compare those quotes and what each insurer offers to cover.

  • Fourth, chose the plan and buy it.

In the fourth step, before you officially buy car insurance, you must be completely sure about your car insurance policy as, you’ll find there the situations in which you can make claims, the help you’ll get from the company and, most importantly, the cost of your premium and excess. Once you sign your policy, if you want to make a change, you will probably have to go over a long process to make your insurer allow you to decrease your premium or increase a cover, for instance. Of course, it will depend on what you want to change. Remember, there are additional covers you are able of adding at any time.

How is car insurance premium calculated?

As we said before, insurers have some factors to analyse when they evaluate vehicle insurance premiums. In order for you to understand the price you’ll get, you have to understand insuring a vehicle is no other thing than paying in advance for possible car problems you may have to face. In other words, premium is calculated by estimating how much money will it cost to solve a certain vehicle related problem. For example, if it gets broken due to a collision or usage. This is the principal reason why it’s impossible to calculate car insurance premium cost without knowing a thing or two about the vehicle you want to get insurance for.  

What’s the average car insurance premium in South Africa?  

When South Africans look for an average price on car insurance, they find out there’s no such thing and we’ll explain why. Apart from everything we have explained so far, there’s another factor to keep in mind when paying for vehicle insurance. Your premium will differ according to the cover you select to protect your car with. If you decide to buy the simplest 3rd party, it will be much cheaper than to pay for a comprehensive cover. Of course, your car will also get unprotected against many risks.

Is it possible for me to finance my car insurance premium?  

A common doubt about premiums for car insurance is how should it be paid. Many drivers ask themselves id they must pay for the quote the company shows them the moment they sign the policy. The answer is no. Of course, you can discuss payment details with your insurance broker but, whenever we refer to premiums, you have to make monthly payments. This means, you get your quote, which is the total amount you have to pay for the vehicle insurance plan you choose, but you divide it over several months. In this matter, we should start referring to car insurance excess as, it’s directly related to how much premium you’ll pay. However, we’ll focus on that later on to expand on it in detail.

Will my car insurance premium change the second year? 

When buying car insurance, you pay your premium over 12 months, which is the period your policy lasts. After that time, you must decide whether to renovate your vehicle insurance policy or, cancel it. At this moment, you will have driven your car for an entire year which, of course, will lower its value. This is why, your car insurance premium will be different the second year. So, your car will go over checks and, your car insurance quote will be calculated again to update your premium. Once again, you can choose to have a different cover if you think the cost gets too expensive.

How do I choose among the many car insurance premium offers?   

This step involves the biggest difficulty on the process of selecting car insurance. We want to make sure you know you shouldn’t just compare the prices as; you might get with a cheap premium but, your car won’t get properly protected. This is why, we always recommend our readers to pay special attention on the car insurance plans. For example, if you decided to buy a comprehensive package for your car, you can draw a table to compare what’s included on each option. That way, it will easier to distinguish the best price for the best protection.

Will my car insurance premium increase if I make a claim?  

The moment a customer gets a quote to insure their car, the premium is established as regards as the vehicle conditions and the plan chosen. If an eventuality takes place and you have to lodge a claim, the company will cover for what you bought. But the premium will maintain until your policy due date. Now, there are two important points to keep in mind:

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  • Insurers usually states a certain number of claims per year.

  • When you get vehicle insurance again, the insurer will include the claims you made in the risk evaluation process.

Is car insurance premium affected by where is the car parked overnight?  

Yes! Insurance companies pay attention to how responsible you are with your car. Not only as regards as your driving behaviour but also, as regards as safety details you can consider. One of them is, clearly, if you park your car in the street or in a garage as, the vehicle’s risk of being stolen is higher when is parked in the street, of course. In addition, any measure you can take to prove you do your best to keep your car safe will be a possibility to pay a cheaper premium.

How to lower Car Insurance premiums?   

Nowadays, South Africans find it hard to keep up with daily expenses. As a direct consequence, car insurance tends to be left aside in most families. However, there are few tips you can consider to get your premium drop and avoid driving your car unprotected at the same time:

  • Dismiss extra car insurance packages that aren’t important. For example, car hire.

  • Make sure to have a safe place where to keep your vehicle.

  • If possible, when you’re out, look for a safe parking place.

  • Accept to install a tracker to your car. Vehicle insurance brokers relay on this gadget to have a track of your driving.

You can reduce your car insurance cost significantly by proving the insurer you’re a responsible person when it comes to your vehicle.

What happens to car insurance premium when a car is written of?   

There’s a special term used for cars that gets broken or damaged in a way that’s no longer worth paying for repairing it. Those cars are referred to as being written off. This is a particular situation you shouldn’t forget to take notice of as it can be of great help. Let’s imagine your car has an accident and it ends up really damaged. If, when the mechanic evaluates the fixing cost, they state that cost is much higher than the value of the car, the insurance company, of course, won’t accept paying for it. So, in this case, you’ll be covered only if this situation is included in your motor vehicle insurance policy. Certainly, the premium is higher if you want to have this cover included but, it will represent being supported if you can’t use your car.

Is car insurance premium different for breakdowns?  

When we focus on specific situations car insurance covers, we have to refer to the different vehicle insurance plans: 3rd Party only, Comprehensive and 3rd party, Fire and Theft.

Generally speaking, insurers include roadside assistance in their vehicle insurance options. All the same, it depends on each company what’s included in it. For example, some of them only offers towing your car to a panel beater while others include certain types or repairs. Once more, it’s your job to make sure breakdowns are included in the car insurance premium you pay.

Is a Third Party cover premium the cheapest option?  

Among the many vehicle insurance options available, there are the 3 commonly known by drivers which we have already mentioned. As Third Party Only is the one that covers the lest it is, in turn, the cheapest of all. However attractive a cheap quote may seem; you need to know you won´t be covered in case your vehicle needs some type of repair. If, for instance, you need to fix your car after a collision, you will have to pay everything form your own pocket. As fire and theft are also excluded from this plan, you might want to have the next level in protection cover, 3rd party, Fire and Theft.

Car Insurance: Excess vs Premium 

We’ve already said something about Excess car insurance and the relation with premiums. What you must know about it is that you are the one deciding how to pay for them and it goes like this. Firstly, excess is the cost you would have to pay in case of making a claim. Secondly, you will decide to pay a higher premium per month and a lower excess or, to pay cheaper premiums and, a higher excess. It’s important you know that, in case you don’t lodge a claim, you won’t pay excess. So, in that case, a lower premium will be appropriate.

Why do car insurance premiums vary from city to city?  

Even though we refer to one country, South Africa, the dangers vehicles are in vary from city to city. A great example is referred to weather. If you live in an area where hail storms are common, car insurance companies will get higher premiums for that cover. Similarly happens when referring to crime rates. We know there are areas where vandalism or hijacking are everyday problems so, insurers pay close attention to each suburb risks to calculate car insurance premiums.

Will my car insurance premium increase if I do some adjustments to the car?

The insurer company you choose to get your vehicle protected will do an inspection on the car to detect any particularity that may affect your car insurance. If you have made special adjustment to it., they will be analysed in terms of how risky it is to drive with them. Also, if will be studied if, due to those modifications, your car may suffer attempt theft. Such is the case of high technology sound system, for instance. In these cases, you probably get a higher vehicle insurance premium.

Car Insurance Premiums

What is car insurance Premium?

It’s the sum of money you pay for car insurance.

How does Premium work on vehicle insurance?

You pay each month your car insurance premiums and, the company pays you for previously stated problems.

What should be known about premiums?

You can increase or lower your premium by choosing proper vehicle insurance cover.

We can close this article knowing we have informed you about vehicle insurance premiums in South Africa. Now, you are more than ready to discuss your insurance cover with few companies to buy the car insurance your car deserves.

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Questions and answers

Is it better to pay more excess?

It depends on the driver. If you know there’s little chance you have a car accident, you might have a higher excess assuming, clearly, you might don’t even have to pay it.

What if I stop paying my premiums?

The insurer won’t be forced to accept any claim if you haven’t paid your premiums.

Can I lower a comprehensive premium?

Yes, if you compare prices and don’t add special coverage.

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