How to reduce your car insurance premiums

The average claim for youth drivers aged 18-25 in the 2017 financial year jumped to R40,976, up from R36,055 in 2016, according to new data published by Alexander Forbes Insurance.

The insurer revealed that 70% of drivers in this age category are driving hatchbacks – 30% of these are Volkswagen.

The average claim amounts among young drivers show cabriolets to have the highest average claim amounts, followed by coupes, SUV’s, hatchbacks, and sedans.

The top three had averages of between R50,000 and R70,000 per claim, with hatchbacks and sedans averaging R37,000 per claim.

BMW, Mercedes, Jeep and Mini had average claim amounts of more than R45,000, and were the top youth-driver brands in this category.

According to Colin Mchunu at Alexander Forbes Insurance, 87% of youth-driven vehicles are insured on policies where the main policy holders are older than 32 years of age.

“We recommend that parents arrange for their children to rather take out their own insurance cover as soon as they acquire their first vehicle. Even though this can cost more to start, the benefits are that the young driver builds their own safe driving history sooner and accidents would not be on the parent’s record.”

Parents can still pay the premiums for the cover by linking payments to their account.

Mchunu said insurance companies generally classified young drivers as high-risk due to their lack of motoring experience. “Because youth are more likely to have an accident in the first year after getting their driver’s licence than at any other time in their motoring career, this results in this category being charged higher premiums.”

On average, drivers under 25 pay about 30% more than drivers over the age of 25, the insurer said.

“The likelihood of a young, relatively inexperienced driver being involved in accidents is high owing to among other factors, driving at higher than the regulated speed limit and risky driving behaviour,” Mchunu said.

Mchunu suggests that for the youth to reduce car insurance premiums they need to:

  • Drive a vehicle with a small engine;
  • Upgrade safety features – keep the vehicle in a garage and install a tracking device for stolen recovery purposes;
  • Limit their mileage;
  • Build up a good claims track record – The better your claims history the more you are likely to save on insurance;
  • Elect to pay a higher excess as higher excess will result in lower premiums, but make certain you can afford the excess when you claim;
  • Don’t ‘pimp’ your car – Aftermarket changes to the engine or body can end up costing you.

“In addition to the above another good way to keep risk down is to enhance the security features of your car, and consider taking defensive driving courses,” said Mchunu.

Read: The cost of owning a car over your lifetime

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How to reduce your car insurance premiums