It is rare to go through life without some sort of material loss due to a theft or an accident. Fortunately, back in the day Chinese, Babylonian and Mediterranean traders developed the beginnings of insurance. In 1750 BC, when navigating turbulent river rapids, they would distribute their products across many vessels to limit the loss should one of them capsize. The Mediterranean sailing merchants went further by implementing a system whereby they procured a loan to fund shipments and they would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen or lost at sea.

Most people who have insurance do not have to claim very often and it is perhaps for this reason that most people see it as a grudge purchase. Paying the premiums may be painful but having to cover a large loss can be even more so.

Johan van Greuning, Head of Standard Insurance Limited says “Coming home from a vacation to find that your furniture and electronics have been stolen, or having a car accident that writes off your car, are events that can really dent your finances and most people cannot afford to absorb this kind of loss. While we may not like paying the premiums the good news is that there are steps you can take to reduce your insurance premiums”.

Here is a list of things you can do that will save you money and also improve your chances of making a successful claim.

Your Home

  • The more security you have the cheaper your premiums. Installing burglar alarms and bars, security gates, electric fences and initiating armed response will all result in a reduction of premiums
  • If you have jewellery that you don’t wear put it in a safe or a bank vault rather than insuring it. If you do not remove certain jewellery items from your house it will be covered under your household contents anyway.
  • Self-insure items that are easily lost or stolen like cell phones and laptops. Put some money aside each month until you recover the cost of replacing these items. You will also get the added benefit of earning interest on the money.
  • Do regular maintenance on your home, letting your home fall into disrepair may negate a claim.
  • When you take out household insurance you will have to put a value on all of your household goods. Some people undervalue their belongings to try and reduce the monthly premium but that could cost them. If for example you insure contents for R100 000 but it’s worth R200, 000, your insurance company will reduce the pay-out by 50%.  If you want to get paid out in full, don’t undervalue your belongings.
  • If you are going away on holiday, switch off your geyser. You will not only save on electricity but avoid a nasty surprise of your geyser bursting while you were away.
  • Fitting smoke detectors in your home are generally inexpensive. They can ensure your home does not go up in smoke and also offer extra protection to you and family.

Your Car

  • Having an alarm and a tracker will reduce your premiums.
  • If possible park overnight in a locked garage or behind locked gates.
  • Always be specific about where you live and how the car is secured, if you don’t tell the truth your claim will not be paid out.
  • If you take a bells and whistles policy you will pay more. If for example you want a rental car if yours is damaged it will cost you extra.
  • Be cognizant of the fact that the bigger the engine in your car the more expensive it will be to insure; the type of paint also affects your premiums.
  • Take an advanced driving course, it will reduce your premium and reduce your chance of having an accident.
  • If you do any modifications to your car that make it go faster your premium will move up as well.
  • Keep your car maintained and always in a roadworthy condition. Smooth tires or ineffective window wipers could affect your claim if you have an accident.

You should also consider structuring your excess to suit your individual needs. The larger your excess the lower the premium. You can put some money aside each month until you have enough to cater for the excess in case of an unexpected claim.

Another tip is to combine your insurance policies. Some insurers provide a discounted premium for your motor vehicle if you also have household contents insured on the same policy. One insurance policy covering your household contents and motor vehicle also mean you are paying a single debit order and single policy fee.

“The best way to keep premiums down on both your home and car is to minimise claims. Sometimes it is better not to claim for losses on small low value items. This will keep your insurance record clean and usually reduce your premiums.  Be careful with your assets and you will have the best of both worlds; peace of mind and inexpensive cover,” concludes Mr van Greuning.

Unfortunately insurance fraud is a huge issue for insurers so don’t turn a blind eye if you know someone is submitting a fraudulent claim. Ultimately everyone pays for this crime as it forces insurers to increase premiums across the board.

Article credit: