Sadly, insurance is often viewed as a grudge purchase, and most people say that they just don’t have the money for it. Unfortunately, things often happen that are largely out of our control – like a car accident – and it’s at these moments that we wish we’d paid the small monthly premium.
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Another misperception in South Africa is the perceived mountain of administration when signing an insurance policy. Yes, you should be getting a few quotes, and comparing the options out there – but you don’t have to do it all yourself.
Using a comparison website will assist in finding the best insurance quote, make sure the site is independent, so it’s a true, honest look at the options available to you. But what pitfalls are there? What should you look out for? CompareGuru CEO Travys Wilkins has a few tips:
1. Take time to read the fine print. You don’t want to put your most valuable assets at risk by acquiring inadequate cover. That’s the most important factor to consider – sufficient protection. Therefore, it’s important to shop around and weigh up your options. Know your policy, know what the limits are and know what you’re paying for.
SEE ALSO: Why you need life insurance cover
2. Don’t be dishonest. An insurance policy is essentially a legal agreement between two parties; the insured and the insurance company. This agreement is based on trust. You, as the policyholder, trust the insurance provider to cover you accordingly in the event of damage or loss. In return, the insurance company trusts you to pay your premiums and furnish them with accurate, honest information from the onset. Lying to your insurance provider will result in your claim being rejected, and you’ll have to pay for all the damage or loss out of your own pocket.
3. Lower premiums vs lower excess. Most people will opt for lower monthly premiums, but what they don’t always realise is that to get the same amount of cover, of the same value, you’ll then have to face higher excess fees when you claim. It is often better to pay a higher premium every month and select a lower excess. The reason for this is simple; you can budget for monthly premiums. You know what you’re paying.
SEE ALSO: Why you cannot be without car insurance
In a nutshell, opting for lower premiums may save you money from month to month, but it will end up costing you far more in the long run.
