Don’t Cancel Your Insurance, Explore Your Options Instead
All across South Africa businesses and families are feeling the Covid-19 financial pinch and when budgets are stretched thin, many of us start looking for monthly expenses to cut back on, or to eliminate entirely.
As tempting as it may be to list your insurance policies as an ‘unecessary expense’ and to begin cancelling your business, car, home or life cover, you may want to consider taking steps to reduce your premiums instead. Talk to us about finding ways to save money and to maintain your cover at the same time.
What can you do to reduce your premiums?
Revise your excesses
Increasing your excess is one way to lower your monthly premium. It would, however, mean you’d have to pay out a higher excess amount in the event of a claim. So make sure you have enough cash before making this decision.
Consolidate your insurance
Having umbrella car, household and building insurance often means you’ll pay a lower total monthly premium so it’s worth consolidating your policies with a preferred insurer.
Update your retail values
If you’re looking to save on your car insurance, consider updating your car’s retail value, this should reduce your cover amount and lower your premiums.
Rather than cancelling your car policy, switch from a comprehensive policy to a third-party, fire & theft policy instead – especially if your vehicle is several years old and is fully paid off.
It’s not advisable, but if you live in a high security estate, you could consider excluding theft cover from your home policy. This should reduce your premiums as you’ll no longer be covered for the loss of items stolen from your home.
Cancelling your cover could cost you more in the long run …
By staying insured and not claiming frequently, you build a low insurance risk profile. In other words, your insurer will consider you a low risk and offer you better premiums as the years go by. If you cancel your policies frequently, you may end up falling into a higher risk category. This could result in higher premiums, and it may even cause some insurance companies to refuse your applications in the future.
Whatever you decide to do, don’t just stop paying your insurance premiums and assume that your insurer will cancel your policy.
If you’re battling to manage your finances and you miss a payment without meaning to, it’s worth noting that under the Long-Term Insurance Act, you’re allowed a 15-30 day grace period within which to pay.
If your insurance company is forced to terminate your policy due to non-payment, you will need to declare this on future insurance applications, and it could lower your chances of being approved.
Also, don’t forget that virtually every car financing agreement requires you to maintain a comprehensive car insurance policy while the outstanding loan amount is being paid off. If you cancel your car insurance, you’ll be violating the terms of your financing agreement which could result in you losing your car altogether.
At GRIB, we have excellent relationships with many of South Africa’s top insurers which means we’re able to offer a range of products that may offer the best solution for you. We’re also experts at helping our clients source the best cover for their budgets. Contact us today on 044 382 0550for more options and info.
* This article is provided for informational purposes only and should not be construed as legal or financial advice.