Loading ...Posts Tagged ‘cheap car insurance for over 50s’
Consider the following scenario that really happened recently on a busy highway in Johannesburg. An elderly gentleman was in the fast lane of the highway with a string of cars behind him. He was driving at around 75km per hour and the younger guy just behind him was getting increasingly frustrated and impatient. When he finally managed to get into the lane just left of the elderly man, he slowed down and with arms waving tried to indicate to the older man that he must move out of the fast lane. The elderly man didn’t even move his head, he just held on to the steering wheel and continued driving in the fast lane. He was clearly concentrating and didn’t even give other drivers a thought.
The actions and reactions of other drivers on the road in this scenario raises a few questions. Are older drivers a bigger danger on the road than younger drivers? Should older drivers be penalised for their age when their car insurance premiums are calculated? Or could we argue that they should pay less for car insurance than younger drivers because they have the benefit of experience behind them?
If we look at the facts around this subject, we know that car insurance companies favour females above males as far as calculating car insurance premiums go because females are known to be better drivers than males as they are more patient and often have children as passengers. It is also a fact that young males – usually those under 25, are known to be high risk drivers because they are prone to speeding, drinking and driving and in general not very attentive on the road. Males and females over 40 are seen as drivers with lower risk as they are more experienced and not as impatient as younger drivers and therefore their car insurance premiums also tend to be lower.
It is, however, also a fact that as people age, factors like impaired vision, mental and/or physical deterioration, slower reaction times and a lack of confidence on high speed roads can severely impede their driving skills. The question is how do car insurance companies determine at what age car insurance premiums should increase, and is it fair to assume that all people reaching that specific age would automatically qualify as high risk?
If looking at statistics that the National Highway Traffic Safety Administration in the USA released, drivers between 64 and 69 are the safest drivers on the road, no doubt, because they have years of driving experience behind them and also because they have learned the art of being patient. Unfortunately, many people in that age group are already suffering with age related disabilities and car insurance companies could argue that even though that age group was proven to be the lowest risk for them, they should be paying more for car insurance because their physical deterioration turn them into high risk drivers.
This issue could be debated and discussed and pulled apart, argued for and against charging senior citizens more for car insurance and setting an age at which this should happen for whatever reasons are decided. The question, however, remains. Can a specific age be determined at which senior citizens should be charged more for car insurance?
We all want cheaper insurance. Though it is a necessity, most people tend to view their monthly premium as a grudge payment. Insurance companies across the board use the lure of cheaper premiums very effectively in marketing campaigns; in certain cases even offering to pay out an agreed sum of money should they not be able to provide you with a cheaper quote.
But what exactly is cheaper insurance? A cheap monthly premium is not the only consideration to keep in mind. An insurance policy is, in essence, a legal document, and the document in its entirety has to be reviewed thoroughly in order to ascertain the cost effectiveness of your insurance.
A starting point would be to confirm that the policy you select is fit for purpose and covers your insurable interest (for instance, if you are the only person driving your car, there is no reason to have a policy permitting more than one driver).
In addition, the following can be considered:
Excess
This is where most people lose with their vehicle insurance. The amount of excess you will pay in the eventuality of a claim is directly proportionate to the cost of your monthly premium. As an example (using very simplified figures):
Sandra pays a monthly premium of R100 towards comprehensively insuring her car, a late model sedan. She is covered for the full retail value of her vehicle should it be stolen. Her excess is 15% of the claim with a minimum payment of R5, 000.
Dan pays a monthly premium of R150 for the exact same vehicle. He is also covered for the full retail value of the vehicle, but his excess in such an eventuality is only 5% of the claim, minimum R2, 500.00.
Assuming that the model of car in question has a retail value of R100, 000.00, Sandra will only get a settlement of R85, 000.00, whilst Dan will get a payout of R95, 000.00.
In addition to the basic excess explained above, additional excesses should also be taken into consideration. The full description of excesses will always appear in your policy. You can use this schedule of excesses to help you determine whether your cheap car insurance is really as cheap as claimed.
Policy Wording and Inclusions/Exclusions
The way in which your policy is worded along with the specific inclusions, exclusions and conditions pertaining to your insured vehicle also plays a huge part in ascertaining how affordable your car insurance is.
Let’s continue with Sandra as an example and assume that she has lodged a claim for a stolen vehicle. Sandra bought her car with a factory-fitted alarm, but never installed a VESA-approved gear lock, which her policy stipulates as a security requirement. Because of this policy condition, her claim might be repudiated. This means that her “cheap insurance” potentially ended up amounting to “no insurance”.
Dan, for instance, might have installed an expensive sound system in his car, never realizing that additions such as those are excluded in his policy. He might have his claim settled for the retail amount of the vehicle minus the excess, but he will incur a loss with the sound system.
On the other hand, specific inclusions might make the insurance policy more worth-while.
Enticers (or Policy Sweeteners)
Policy sweeteners are terms and conditions in your policy with the specific purpose of making it more attractive.
An example of a policy sweetener might be that you will pay no excess (or greatly reduced excess) should you lodge a windscreen claim. Or that an extra driver can be added to your car insurance policy without affecting the monthly premium.
These are always worthwhile to consider when looking at getting the cheapest car insurance.