Some Insurance Questions

[bmboy]

Ok so the amount of insurance related information on the interwebs is quite overwhelming so I'd like to throw a few insurance related questions out there.

Here's the deal. I have never owned insurance before so I'm still trying to wrap my head around the whole concept of buying insurance.

I'd like to purchase a car soon and comprehensive insurance is a must. My current car is registered and insured under my dads name. My idea is that, if possible, I'd like to take out insurance in my name on the car which I drive 95% of the time with the hope that in doing so I will be able to improve my risk profile and thereby reducing the premium on the car I buy in my name, similar to building a credit record. Note that insurance on the current car will be considerably less than what I was quoted on the various cars I'm interested in buying. Please advise if this reasoning sounds logical.

How do I go about buying insurance? Through a broker or through an insurance company?
Which is the better option and why?
If through a broker, how do I find the right one? Through referrals from others?
Which is the best way to deal with a broker? Face to face? Over the phone? etc. The reason I ask this is because I've been referred to 2 brokers in other cities where a face to face consult is not exactly possible hence my reluctance to deal with them.

Thanks in advance

 

[guest2013-1]

Personally, having dealt with brokers before, the best experience/service I've received was going "direct". I'd recommend Outsurance.

Depending on your age, how long you've had your drivers license for, where you park your car during the day or night, what color it is and which area you live in, if you have a tracker installed etc. your risk profile will be calculated and so does your premium. You might actually pay more than you currently do on the car insurance because your dad is older and (according to them), the safer driver.

For example, when I was 23 I bought my first car. I paid R1400 insurance (almost as much as the repayment on the car). In 2007 (which made me 27) and with a car almost 3 times my first car's value, I paid R950.

To save some cash you also have to play around with the excess though, the have very low excess fee's (the fee you pay once-off that's refundable depending on who caused the accident), so you have to assess what you can afford financially to shell out immediately if an accident does occur. A higher excess doesn't mean much lower premiums though, I found that there's a "sweet spot" and that it to be around R5500-R7000. So if you can afford to fork out the cash then you'll save at least R200 a month.

In 2008 I went to Dubai, so my car stayed at home with my dad. The car was in my name and so was the insurance, and I phoned them up and said I'd like to put my dad up as the primary driver, since I won't be driving around with the car, only occasionally when I'm in South Africa.

They took his name/age (and I think ID number) and my monthly premium went down from R950 to just under R400. So if you do get the car insurance, keep it for a few months and then maybe do the "trick" I did. I was back in SA from 2009, and only had to pay R400 a month roughly. Almost 50% less I would have if I was the primary driver. So yes, they lie when they say it's custom-made to your own risk profile. Even though they keep records and you have to disclose if you have had a claim in the last few years (even if it's on someone else's insurance), I don't think it really matters as much as how old you are and how long you've had your drivers license for.

Best thing is to phone around and get quotes. But the best service I've received in the last 12 years was from Outsurance (I was with Auto & General for a year or two sometime between the middle of my car-owning experience, service sucked)

 

[^^vampire^^]

Even if you going direct I've found Outsurance to be **** expensive. They wanted to charge me R1800.00 a month for a 2003 Hyundai Tiburon. Go to hippo.co.za and type in all the details and they'll give you the average price for a couple of different place plus all the important details for each insurance policy.

 

[satanboy]

Personally, having dealt with brokers before, the best experience/service I've received was going "direct". I'd recommend Outsurance....

1) I wouldn't touch Outsurance with a barge pole....(A few of my friends burnt their fingers).
2) Work through a broker
3) You cannot insure something that doesn't belong to you (car in fathers name).

 

[Bona Botse]

If you were listed as the regular driver under your father's insurance then you were covered for all that time. In other words, however long you were driving that car is also how long you've been insured for. So when your new insurer asks you how long you've been insured for, don't say you've never been insured, because you'll be setting yourself up for some ass rape.

As to your questions, you can go through a broker or go direct, but in my experience a broker will almost always be better and cheaper if you're still relatively young (under 30).

I'm insured via a broker and I've never met anyone face to face. My primary means of communication with them is through emails. I had a lightning damage claim that was sorted out, all through emails and a few calls, so it shouldn't really matter where in the country the broker is.

I went with that broker because they came highly recommended by one of my colleagues, who was the same age as me and drove a similar class car to mine, except that with OUTsurance I was paying nearly R3k for just my car, while he was paying R2k for his car, his wife's car and R200k household. Got a quote from his broker, and it came to R2.5k for two cars and R300k household.

Good luck.

 

[bmboy]

Thanks for the advise. I was also told that a broker would probably be able to get me a better deal. The problem is finding one that I could preferably deal with face to face. I've heard stories about dealing with brokers over the phone etc that can result in documents magically disappearing when it comes time to claim. I get that this may be a generalization, but it's made me weary about dealing with just anyone. I did get some quotes from Outsurance which were outrageous ranging between R1500-R2000pm. Granted the cars I requested quotes on are considered performance cars (around 2005 GTI, 325i territory) and I'm 25 which I guess is the mid-high risk age group. Surprisingly an e46 325i is R500 cheaper to insure than the same model GTI through outsurance. Hippo.co.za doesn't even provide me with sufficient quotes on those cars to give me a rough idea of what it would cost. The quotes that were provided are those that require a tracker to be fitted which monitors your driving style. That's not what I want. I'm also waiting for standard bank to provide me with some quotes as well.

I may also consider insuring some of the household contents as well as we only have building insurance on the house. At the moment I'm just trying to get a feel for what I'll be paying for insurance before I purchase a car so that I can sort out my finances accordingly. Any idea as to how long it takes to get insured and what the process is? I'm looking to get pre approved finance on whichever car I decide to buy, but from what I understand one of the conditions when financing through a bank is that the car must be comprehensively insured before I can take delivery.

 

[ViperGTI]

For your age and car (GTI), in my experience when I was that age (I drove a Golf 4/5 GTI at that time... can't remember), Outsurance and all these companies that "cut out the middleman" are a no-go. They all charge around R1800.

The best quote I got was from Santam at around R1100 (includes house contents cover for R100k). I would recommend going through a broker though... preferably through someone referred to you, perhaps the same people that insures your parents (as you already have history with them) or from references here. Maybe just specify where you are based so people from that area can recommend a broker... then again, even though my brokers are in the same town as me, I've never met them in person, but I know they are reputable and I'm getting a great rate.

 

[bmboy]

Thanks. My dad is insured through standard bank. I have requested a call back from them for a quote so just waiting on that. I am based in East London. Maybe I'm just paranoid, but what I'm worried about is dealing with a broker and then 3years down the line when I need to claim, the broker disappears. I will request a quote from Santam as well. Can anyone shed some light on the processes involved and how long it takes when taking out a policy? I have not decided on a car yet and may not even go for the ones i mentioned above. When I do eventually find the car I want what do I need to do? As far as I know the banks have quite strict terms and conditions if they finance the car in terms of insurance etc.

 

[noxibox]

The problem with brokers is most of them are lazy and/or incompetent. They'll typically just have one or two insurers they always use, they won't get you any better rates than if you go direct and they will be of no help when you need to make a claim. This goes even for supposedly reputable brokers. They're mostly there to take your money.

I'd avoid Santam. They'll offer you a very good premium, but you'll pay the price when it comes time to claim.

 

[bmboy]

Ok so I got a call from Standard Bank Insurance. Similar to Hippo they get up to 7 quotations as far as I know. Here are the cheapest they've offered me (Quite impressive compared to outsurance which is almost double the price just for the car):

2005 Golf Gti 2.0 FSI - R1165pm with 5% of claim excess (minimum R2000)
2005 Golf Gti 2.0 FSI + R150k Household contents - R1040pm with 5% of claim excess (minimum R2000)
2004 BMW 325i - R1040pm with 5% of claim excess (minimum R2000)

These are through Hollard. The other quotes go up to about R2k per month.

 

[ViperGTI]

Those are not bad. My broker put me with Hollard as well although I think the excess is lower than other companies if I'm not mistaken. I think there is an option to increase your premiums by a couple of rands and then you pay a fixed excess or something like that. Can't remember now as I haven't examined it in a while.

 

[snail]

I go through miway. For 2 vehicles (both under 3 years old) I only pay R950 with an excess of R1500. Owe....I'm still under 25 and I'm a male.

 

[Freshy-ZN]

I'd avoid Santam. They'll offer you a very good premium, but you'll pay the price when it comes time to claim.

I am very surprised to hear you say this. Santam is the best of both worlds as far as I am concerned: best premiums and best claims handling.

 

[Greg C]

1) I wouldn't touch Outsurance with a barge pole....(A few of my friends burnt their fingers).
2) Work through a broker
3) You cannot insure something that doesn't belong to you (car in fathers name).

Incorrect. Lets get some facts straight.Here in south Africa unlike say USA to buy or own a car a license,registration and INSURANCE must be taken on the car as part of legislation,hence the License and registration the movies love using when a policeman stops a car in the USA.

Here in south africa, it is not required of you to have insurance LEGISLATION wise. The banks push for it if they give you finance but do read up on stories of people canceling their insurance etc.

Getting back to his scenario and my point.

You need to seperate your car and insurance.You can most certainly insure a car on someone elses name as a policy(ie a contract) is what you are paying for IE a risk benefit if something were to happen under certain conditions.

What you really do need be careful of,is the story I read above about the dubai thing.Yes you are in a sense duping the system and it feels great for the almost R500 reduced premium,but if you crash during the period,and an investigation is made by the insurers(they have ad epartment that are paid to make a target each month in how many policys they can void) find that according to what you disclaimed in signing does not fall within what actually happened policy is cancelled and you get squididdly-do nothing.

As advice,go with a broker.Why because even though brokers have a bad reputation,they give advice(atleas the good ones) and most importantly fight and help you sort out issues when insurers become difficult on paying out a claim WHICH im sure you know already THEY ARE.It is his responsibility to sort the claim out not yours,that is what you pay him for.If you go direct,and you have limited knowledge good luck fighting the insurer.

 

[fantasticfred]

Ok so the amount of insurance related information on the interwebs is quite overwhelming so I'd like to throw a few insurance related questions out there.

Here's the deal. I have never owned insurance before so I'm still trying to wrap my head around the whole concept of buying insurance.

I'd like to purchase a car soon and comprehensive insurance is a must. My current car is registered and insured under my dads name. My idea is that, if possible, I'd like to take out insurance in my name on the car which I drive 95% of the time with the hope that in doing so I will be able to improve my risk profile and thereby reducing the premium on the car I buy in my name, similar to building a credit record. Note that insurance on the current car will be considerably less than what I was quoted on the various cars I'm interested in buying. Please advise if this reasoning sounds logical.

How do I go about buying insurance? Through a broker or through an insurance company?
Which is the better option and why?
If through a broker, how do I find the right one? Through referrals from others?
Which is the best way to deal with a broker? Face to face? Over the phone? etc. The reason I ask this is because I've been referred to 2 brokers in other cities where a face to face consult is not exactly possible hence my reluctance to deal with them.

Thanks in advance

Hi as someone who used to work as an insurance broker and who no longer does I have a pretty good objective stance on the matter.

These days everyone is trying to get on the whole "no broker fees" bandwagon for short term insurance. The truth is that makes up very little of most insurance brokers commission takings. Mostly they sell short term insurance to try and secure your other insurance needs which is where they make real money. So while outsurance etc may give the impression that they are free of broker fees what in fact they are doing is replacing brokers with in house sales agents who probably cost them a lot more than just paying a small brokering fee would. They also spend way more on advertising and gimmicks like "cash back"which reflects as to why their premiums are higher and level of service is lacking.

I personally would go with a reputable broker who stands personally responsible for your claim needs etc. Like all things in life cheap insurance probably means a low level of service or when you need it to pay out you'll have to climb through hoops to get payed at all. Make it your brokers problem. He likely deals with many claims a week and can get things sorted and advise you far better than some phone jockey who you will never meet face to face.