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How to Shop for Car Insurance

Shopping around for insurance quotations can be a real pain in the proverbial backside. In fact, collectively we have such a perceived adversity to it that many online quote comparison companies have sprung up to capitalise on this, and by and large they are quite successful. Using these companies, like the very well-known Hippo, can provide an excellent starting point for your hunt for the perfect vehicle insurance cover. However, it is always advisable to shop around more and see exactly what is on offer in the market before making any hasty decisions.

We have compiled the following 5-step plan to make it easier for you to get the best deal possible when shopping around for car insurance:

Step 1: Find Out What Your Vehicle’s Value Isshop-for-car-insurance

This is something many people never think about. In the event that your vehicle is stolen, your insurance company will base their settlement on the retail value of the vehicle. Say, for instance, you have a vehicle that is worth R50, 000.00, yet you have insured it for R70, 000.00. Should the vehicle be stolen, your claim will not be worth more than R50, 000.00 (before deductions of excesses). This situation is called being over-insured.

Many people in South Africa have over-insured vehicles without being aware of it. You can easily find out the retail value of your vehicle by phoning a car dealer and asking them to look it up for you on the Mead and McGrouther system (also known as the “Blue Book”).

Step 2: Look At Your Current Insurance Policy

Take a good look at your current insurance policy, if you have one. Note what it covers and what it excludes. Remember to also note the excesses you have to pay in the event of a claim. Calculate your monthly and your yearly contributions towards the policy, as the quotes you get can be presented in either form.

Once you have those amounts, you have a price to beat and can continue to the next step.

Step 3: Start Shopping

As mentioned above, start with the car insurance quote comparison websites. They provide you with a wide variety of quotations in exchange for very little input. But do not stop there.

Get on the phone and speak to major insurers one on one. You can often bargain better in this fashion, and should be able to negotiate much better rates. Remember to ask the consultant to fax or email your quotation to you as a confirmation of the rates given to you telephonically.

Step 4: Choose, Request, Read

By now you should have a big pack of quotes. Choose a couple that seem reasonable in their pricing, but also include some that you know for a fact are from reputable insurers, even if they are a bit more pricey.

Contact the insurers you chose and indicate that you are potentially interested in making use of their services. Ask them to send you policy schedules.

Once you have received all the policy schedules, sit and read carefully through each and every one. Look out for high excesses, underinsured rates and exclusions. Also pay particular attention to the minimum security requirements your vehicle should adhere to in order for a claim to pay out. This tends to differ immensely from policy to policy.

Step 5: Look At Extras

Consider including extras in your policy, like receiving a courtesy vehicle should yours be stolen or badly damaged in an accident. These options usually only work out to a couple of hundred rand a year extra and are for the most part worth it.

Step 6: Make Your Final Choice

Based on all of the above, decide which policy both meets your financial needs and offers the best package in return.

Going about shopping for insurance in this manner could save you a lot of money, as well as educate you properly as to exactly how much you are covered for and for which eventualities.

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