The 10 Best Ways to Save Money on Insurance in South Africa

Increase Your Excess

The Excess describes the part of your policy that outlines how much you have to pay out of your own pocket when a loss occurs. The concept is that the insured will share with the loss with the insurance company up to a stated amount. Increasing the excess means that you are sharing in the loss amount, this takes some of the pressure off the insurance company when a loss occurs. For this reason insurance companies are often willing to provide a discount for a higher excess.

Change Your Cover

A revision of the coverage that you have in terms of the types of losses that are covered can be reduced on a homeowners policy or a vehicle policy.

On a homeowners policy, if you have the type of policy that pays for any type of damage unless it is excluded, you have a policy that has a broader scope of coverage. If you reduce the scope of coverage, you can reduce the premium. Bear in mind however that certain types of losses will not be covered. Typically, you would move from the policy described above to a 'named peril' policy. This is the type of policy that lists the specific causes of loss that are covered and it only covers those types of losses. This is a risky endeavor because you are in effect reducing coverage and adding risk that you will have to fund a certain type of loss yourself. This type of policy is not commonly found in South Africa.

Your car insurance cover can also be affected. If you have collision and comprehensive coverage, you may consider eliminating these to save money. You may not be able to however if you have a loan on the car. The lender generally inserts a clause in your loan agreement that insurance must be maintained for the car. You could also consider eliminating just comprehensive coverage and keeping collision coverage, which pays in the event of your car's collision with another vehicle or stationary object. Bear in mind again that you will have to pay for repairs on your own in the event of some accident.

Lower Your Policy Limits

Homeowners insurance and car insurance policies have stated values for the limits of liability. A homeowners policy will also have stated values for coverage for the buildings on the property.

If you choose to reduce the liability coverage amount, this could save you premium. Be careful however because this could affect the security of you personal assets in the event of a claim, because you could be held personally liable for damages over and above your coverage in the event of a lawsuit.

If you choose to reduce the amount of coverage on a building, you also do this at your own peril. It may be a wise choice however if the values of the properties in your area, including yours, are far greater than the cost to rebuild the structure. For example, some areas in South Africa have very small homes in very desirable locations, and these can have market values that are much higher than the cost to actually replace or rebuild the property in the event of a total loss. If this describes your property, you can reduce the value for building coverage on your property to an amount that is more consistent with the cost to rebuild a home.

Shop Around

Insurance is a very competitive market and insurance companies in South Africa are constantly vying for your business through ads on television, radio and the Internet. Take advantage of this atmosphere to get the best possible quote for your coverage.

Ask For a Discount

You may find that by simply asking your current insurance agent for ways to reduce your premium, you may find that he is very cooperative and can help you in this regard.

Eliminate Unneeded Coverage

A homeowners policy often times will have coverage endorsements that are added to protect certain aspects or characteristics of the home, which may no longer be necessary. For example if you have an endorsement for rare jewelry or artwork but you no longer own these times, you should take them off the policy.

You may also find that when the policy was new, you had a swimming pool. If the pool is permanently closed, be sure to tell your insurance company as you may receive a credit.

Quit Smoking

Several life insurance companies offer a premium credit if you can prove that you are a non-smoking individual. The reason for this is that insurance companies have found that there are more house fires in homes where people smoke. They have determined that non-smokers are less likely to have fires making them a more attractive insurance customer.

Take A Drivers Safety Course

You have an opportunity to save money on your car insurance if you can prove to your insurance company that you have taken a drivers safety course. The reason for this is somewhat obvious in that insurance companies feel that those who take driver safety courses know and appreciate the value of being a safe driver. Safe drivers have fewer accidents, which is a desirable characteristic as far as insurance companies are concerned, especially with the high accident rate in South Africa.

Make Yearly vs. Monthly Payments

Some insurance companies offer the opportunity to pay the premium in smaller chunks rather than one large payment. These smaller payments can be done monthly or quarterly. If you are paying on a monthly basis chances are you are paying more to do so. Insurance companies prefer to get all of their money up front. However, they will accommodate customers at a cost. You can save a percentage of your premium by paying the entire year at once.

Improve Your Credit Score

Insurance companies use credit scores to determine whether a customer is likely to make any claims. Studies have shown that people with poor financial management skills are more likely to make a claim. A credit score is an excellent measure of a person's ability to manage their finances. South Africa has two large credit score databases.

Utilizing several of the techniques above should help you shave some money from your policy. Be sure to ask your agent about these items, or any other options that may be available to you that would reduce your premium. Insurance is a very competitive market and agents are often willing to do what it takes to keep your business.