Comprehensive insurance is the best type of policy that you can take out on your car, but your monthly premium can be quite high. However, there are alternative insurance options that still offer significant coverage, but may suit your car and situation better.
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Money-savvy individuals with a stable income consider car insurance a basic part of their financial life. There are several factors that determine how much your car insurance will cost (how much the monthly premium is), including the market or replacement value of the vehicle, the age of the driver/s, where the vehicle is parked overnight, which safety features it has and so forth. However, as the world changes, there are several new realities to consider when identifying the best car insurance plan for your needs.
Explore different types of car insurance
It’s ideal to have a comprehensive insurance policy for your vehicle (provided you can afford to pay the monthly premium associated with it), but what if you fall into hard times financially? It can happen.
Unfortunately, too often motorists facing short-term cash flow challenges opt to cancel their insurance outright without realising that they can downgrade to another product until their finances improve.
Third Party Insurance only
You can opt for 3rd-party insurance… This means that while the vehicle itself is not covered, you are covered in the event that you are liable for damages to another vehicle (as the result of an accident).
Third-party insurance is useful for inexpensive cars. Consider this option if you own a long-serving or second-hand entry-level car that you use as a runabout or your school leaver/student dependents rely on to get around. If you feel the value of the car isn’t worth insuring (“it will cost more to repair than it’s worth”), then just insure yourself against 3rd-party claims so you won’t have to pay those out of pocket.
Fire, Theft and Third Party
You can also opt for a 3rd-party, fire, and theft insurance, which covers only these specific needs. It may prove more cost-effective than comprehensive insurance, while still providing you with vital coverage.
See also: Is your car valued under R250 000? There’s a Budget Lite plan for you!
Fleet Insurance
Many mid-level business owners require more than one vehicle to make deliveries, run errands and even transport staff. If this applies to you, you shouldn’t be looking at having insurance for each separate vehicle (in your business’ fleet), because these costs can add up to quite an expense.
What you need is fleet insurance or business insurance that covers your assets, including your vehicles. Speak to your insurer to see if you qualify and what benefits having fleet insurance may have for you. What you save can be put back into your business, such as marketing and product initiatives.
Gap Cover
For new car owners, gap cover is a necessity for the short period during which the value of your car loan exceeds the market value of the car (as a result of finance costs, including bank interest charged on your loan). This happens when your brand-new car is being driven off the showroom floor. The value of the vehicle declines almost immediately while the loan that financed the vehicle remains the same.
Check out Budget Insurance’s Auto Top-Up Plus policy.
Has your daily mileage decreased?
As innovation drives evolution, the insurance industry is keeping pace with technology and using big data to establish new products. For consumers, this means that there are more coverage options available:
Usage-based insurance
While tracking apps have raised concerns about individual privacy, they can play a vital role in car insurance. Usage-based insurance works on the principle of managing and rewarding driver behaviour.
In a nutshell, driving behaviour is monitored, and statistics are gathered by measuring how you brake, accelerate, turn, and use your phone while driving. In other words, the better your driving behaviour, the more your insurer may discount your premium.
It’s a reward-based, incentivised type of insurance that can yield positive returns for your bank balance.
As organisations embrace a work-from-home culture, office workers are spending less time travelling on public roads. There is no daily commute to the office (except on certain prescribed days), meetings have been replaced by apps like Zoom and Teams, and even their groceries can be delivered to them.
As a result, many are using their vehicles less, which means lower fuel bills and less vehicle maintenance. It also means that their risk of being involved in a vehicular accident decreases. In this case, it may be wise to consider changing your car insurance to one that is based on how much you drive.
Remember, value and premium are linked
As your motor vehicle ages, the value of your asset depreciates. While many insurance companies automatically factor depreciation into your premiums on an annual basis, it is wise to also double-check that this is the case on your policy.
The more accurate the insurer’s valuation of your vehicle, the better. This way you are not paying a high premium based on the original price of the car but a premium that reflects the actual value of the vehicle.
Conclusion
As the world of mobility embraces self-driving cars, electric vehicles, ride-share arrangements and AI, the insurance industry will keep evolving new products and services. For car owners, this means that what you pay for car insurance will change and you must stay informed to benefit.
Get a car insurance quote today. Budget Insurance’s team is always ready to help 086 1600 120.
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