The Budget Speech, delivered on 25 February 2015, introduced many significant changes placing further financial burden on cash strapped consumers. Make sure you are aware of these changes, so that you are financially prepared. Keep reading to find out how the 2015 Budget Speech will affect you!
18 July 2013
A number of insurers and financial institutions have come out to issue this warning, including Auto & General, Standard Bank and specialist insurer MUA Insurance Acceptances.
There are many reasons why insurers are upping their costs. Denise Shaw, head of Standard Bank Insurance Services, says that the number and value of insur
ance claims have increased dramatically as a consequence of extreme weather events. “In the last quarter of 2012 alone, Standard Bank had a more than 50% increase in motor and household insurance claims, linked to weather damage,” she says.
The weakening rand has also had a role to play. Christelle Fourie, managing director of
MUA Insurance Acceptances says the sharp decline in the Rand against many major currencies, paired with the frequency of severe claims over the past year, is also expected to have a significant impact on the industry.
But should you just accept your fate and cough up the money? And how do you know if you are getting a fair deal? Here are ten tips to take i
nto account while you are shopping around and considering other offerings:
- Lock your premium: It’s all well and good jumping ship to another insurer who offers you a cheaper price. But there’s always a risk that your new provider increases your premium a couple of months down the way. “If you do get a cheaper quote elsewhere, confirm with the new insurer that you won’t receive a further premium increase within at least six months of moving your policy,” advises Fourie.
- Ensure that your premiums reflect the value of your contents: “Make sure that the noted values or your specified items are accurate. A cell phone that set you back R5, 000 last year will not cost R5, 000 this year to be replaced. So you can reduce that value accordingly, most insurers don’t do that for you,” points out Albert van Wyk, owner of Sureline Insurance Services.
- Don’t always go for the cheaper option: “The general rule of thumb is if premiums are cheaper, cover is less. Ensure you compare the cover, limits and excesses to your current insurance policy to determine whether you are comparing apples with apples,” says Fourie.
- Don’t be afraid to negotiate: “If you’ve had no claims, it is also a good idea to ask your broker to negotiate the proposed increase with your current insurance provider,” says Fourie.
- Consider the value of your relationship: “We advise that you consider all aspects before moving business away, as often the relationship built up with a certain broker and insurance company is worth more than the marginal annual increase requested,” points out Fourie.
- Don’t get ripped off: “An acceptable level of increase in the market currently is between 10% and 15%. If you’ve had no claims any increase above 15% will be considered high,” says Fourie. Focus on your broker fees too. “If you haven’t seen your broker in a year and he is charging R100 fee per month, you are being robbed. A good broker’s fees for average policies are between R25 and R65 depending on the service that you get,” says van Wyk.
- Keep your insurer informed: “Your vehicle cover is always a good place to shave premium. Ensure that the insurer has as much detail as possible about your vehicle. The more detail you provide, the better the underwriting and the lower the premium can be,” says van Wyk.
- Ditch the unnecessary add-ons: “You might be paying for top up cover or short fall cover that you don’t need anymore,” points out van Wyk.
- If you are getting poor service, ditch your broker: “Always look to see if you are paying a broker fee and ask what that fee is for, especially if you deal with an insurer’s call centre and do not get the benefits of a broker,” says van Wyk.
- Don’t make unnecessary claims: If you have a minor prang consider paying for the damage out of your own pocket as it could work out to be cheaper in the long run. The moment you declare the damage to your insurer you could be in for an increase of your premium.
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