It is difficult enough trying to understand the basics of vehicle insurance and even more difficult to understand intricacies relating to guidelines, policies and procedures of today’s insurance providers. Below we have outlined some insurance facts so you are in the know when you are on the go.
1. Your credit impacts your insurance premiums
Certain insurance providers have found that certain credit characteristics of an individual is useful and can predict how likely it is for the individual to have an insurance claim. Although different from what a bank may use to determine lending risk, insurers may use credit score including variable like age of the driver, claims history, the type of car being insured amongst others.
2 Brand loyalty can cost you
If your mind set when it comes to car insurance is “cover it and forget it”, you may want to reconsider. Instead of allowing your policy to auto renew, shop around once a year to ensure you are getting the best rates. Poor rates do not necessarily mean less coverage or poor service. Plenty insurers offer affordable premiums, well-rounded cover and excellent customer service.
3. Stop payments will cost you in the long run
If you think it’s easy to cancel your car insurance by simply stopping payments, think again. Yes, the policy will cancel but insurers can report you to credit bureaus for non-payment damaging your credit score. What’s more, your insurance history will reflect a cancellation by the insurer which may cause a new provider to decline your application or charge you a higher premium.
4. Your insurance company can cancel your policy at any time.
In the event that one or more of its policy guidelines are violated during your policy period, the insurer may cancel your policy at any time. Some reasons for cancellation may be failing to pay premiums on time, losing your driver’s, license due to suspension, submitting too many at-fault claims etc. The insurer would need to notify you in writing and is required to state the reason for cancellation.
A reminder that the insurance policy wording and schedule will always contain all guidelines and important information regarding your policy. Be sure to read through them and ask the insurer if there is anything you do not understand.
Insurance in South Africa: AB Brokers