When coming up with your insurance premium, your car insurance company looks at many things – the car you’re driving, who you are, where you live, what the car will be used for etc. By understanding which factors cause your car insurance premium to change and in which direction, you may actually be able to make conscious choices to save yourself some money.
However, you must be careful about misrepresentation (i.e. lying to reduce the cost of your insurance) as this can lead to your insurer denying your claim. Use the following information correctly and you’ll become a better risk for the insurance company and that’s how you’ll enjoy a better insurance premium! Here we go:
1. Buy the type of car that has a good history – some cars are bought by risk averse people (people who don’t like risky stuff) and some cars are bought by risk seeking people (people who don’t mind a bit of risk). Of course, nobody consciously goes off and decides to buy a car that is more accident prone – it’s just that certain types of cars are purchased by a certain type of person which leads to, overall, a trend of risky cars and not-so-risky cars. Generally a coupe or a sports car is a high risk vehicle while SUVs and Sedans a re better off risks. The more expensive cars are also lower risk for the insurance company. Some low risk car makes are Volvo, Range Rover, Audi and Mercedes. On the other hand, some high risk vehicle makes are Dodge, Ford Mustang, Lamborghini and Nissan Maxima and Patrol.
2. Bring a no claims certificate – with a no claims certificate you show the insurance company that you are less likely to make an accident because you have a history of claims free driving. This is great news for the insurance company and hence they would give you a better price to make sure they win your business. Sometimes, a certificate may not be necessary and just a self declaration of no claims can do the job! It depends on the special facilities that your broker has and which insurance companies they are running such schemes with.
3. Don’t cut corners – one way to save money is actually to spend more money when buying your insurance – so that you don’t have to end up paying more at the time of an accident! To save some cash, you can go for a dodgy B-category insurance company, or you could save a couple of hundred dirhams by not taking up personal accident benefits or rent-a-car or breakdown recovery services. These things are relatively much cheaper to buy so that you don’t have to spend a lot more when an unfortunate incident occurs!
4. Take some risk voluntarily – with the above point in mind, you must realise that some things you can take a risk on if you believe you are a great driver. Don’t take a big risk – take a small risk that can save you some money at the beginning but if things don’t go as planned – at least you won’t lose too much. The best way to do this is to take up a voluntary excess. Though rarely requested, voluntary excesses are a great mechanism to save car insurance premiums. Say, for example, you have an AED 750 excess on your brand new Land Cruiser and you’re paying a premium of AED 6000. Why not go ahead an save an AED 500 by opting for an excess of AED 2500? If you know you’re going to be taking good care of your brand new asset and that you will not make any ‘at-fault’ claims (excess is only paid when you’re at fault or when there is no third party to claim from) then why not take the risk. In the worst case scenario, which is the reason why we buy insurance, you would only stand to lose an AED 1750 more than you otherwise would have but hey – that shouldn’t financially cripple you! Hence, this is a risk worth taking – it also shows the insurance company that you’re really confident in your driving – so confident that you’re willing to share the risk with them, which would make them want you more, which in turn increases your negotiation power with them! Tell your broker to fight your case for a huge discount with a voluntary excess!
5. Tell your insurer about all the good things about your risk – information is super important when it comes to insurance. While it’s an effort, it’s one worth making. If you drive your cars only a few times each month – let us know. If you park it securely in a garage at your villa, let us know. If you live in the Marina area, where claims are lesser than elsewhere in Dubai, let us know! These things can save your money.
[Image source: alainenthusiast.com]