Are you a risk when it comes to car and home insurance?
How many claims have you had in the past three years?
None…? One…? Five…?
The reason I’m asking is because insurance is based very much on “good faith”. You tell the insurer the truth about your claims history, and they give you the best possible deal.
Think about it.
If you tell me you’ve never claimed in five years – and I’ve quoted you R2, 000 a month for insurance – then I stand to make R120, 000 from the deal. I could afford to cut you an even better deal if I really wanted you as a client.
But what if you can’t prove you’re a great insurance risk?
Well this is where first time customers run up against a brick wall.
They’re saying everything an insurer wants to hear but they can prove none of it.
What would you do if you were the insurer? Would you cut them a bare bones deal on their insurance?
A car and home insurance company is like any other business in the way it makes profit:
- It can focus its efforts on attracting low claiming clients, or
- It can focus on high volumes of new clients to offset losses from high claiming clients
For someone starting out with their first insurance policy it makes sense to go with the second option. The problem with this option is what happens when new business starts falling away and claims start increasing?
Eventually you will want to join an insurance company which honours you for your low claims.
This is what you should do if you don’t have insurance history
In order to get that right first build up an insurance track record.
- Pay your premiums for a full year
- Don’t abuse your car and home insurance
- Go back to your insurer or broker and ask for a discount
- If they’re unwilling to help, then shop around
Oh, one last word of advice:
- If you’re twenty years old
- with a driver’s license you’ve only had for two years, and
- you are deciding between a Toyota Yaris and a VW Golf GTI…
Don’t buy the GTI!
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Until next time.
The InsuranceFundi Team