South Africans battling the rising cost of living should not be tempted to cancel their car insurance policies to free up cash flow and should instead look at alternative options to reduce their monthly insurance costs, says Old Mutual Insure.
The latest cost of living squeeze to hit cash strapped consumers was an increase in fuel costs which saw petrol prices rise by 74 cents a litre and diesel by 91 cents a litre thanks to a combination of higher crude oil prices, a weak rand and an increase in fuel levies. While consumer inflation eased to 4% in January from 4.5% in December 2018, this was down from an 18-month high of 5.2% reached in November.
“Instead of cancelling your insurance policy altogether rather sit down with your broker or speak to your service provider to figure out a way to reduce your monthly premium while still remaining insured,” says Christelle Colman, Old Mutual Insure’s Executive for High Net-Worth Solutions. “While it may be tempting to cancel your policy in an attempt to save money, you could end up in a far worse financial situation if you are without cover and end up having an accident.”
Tips for reducing your insurance premiums
Colman’s number one tip to reduce your insurance premiums is to ask your provider to increase your excess in exchange for lowering your premiums. The excess is the portion you are expected to pay towards a claim in the event of an accident so by increasing this amount you are effectively reducing the liability on your insurer who can then reduce your monthly premiums.