How to Manage your insurance during a pandemic!

With COVID-19 wreaking havoc on the economy, many of us are looking at ways to tighten the belt.  We’ve identified 5 ways you can help manage your insurance premium, and also detail a few things you need to consider to make sure it is adequate for your requirements, because with the current economic situation, this is more important than ever.

  1. Consider what ‘extras’ you need right now.
    1. Windscreen options?
    1. Hire car after-accident?
    1. Roadside assistance?

With most of us reducing the use of our pride and joy right now, if you need to save some cash, it might be worth asking yourself if you need all the extras on your policy.  Remember though, while you’ll save money, removing each of these will likely reduce the cover available in the event you need to claim.

  • Does anyone young drive your vehicle?

Driving experience is a big factor in calculating premiums. Generally, the younger a driver the higher the risk and the associated premium. Insurers being the clever people they are, have developed an ‘age restriction’ to help manage premiums.  This means that if someone younger doesn’t drive your car, you can save premium by excluding cover for anyone under a certain age.  For most insurers, 25 seems to be the magic age, but some offer graduated scales with greater savings available based on excluding from a higher age threshold.

  • Are you making the most of discounts available?
    • Club membership?
    • Multi-policy discounts
    • Driver/towing training discounts

There are a multitude of discounts available through insurers.  There is the multi-policy discount, which is a discount for having multiple policies with one insurer.  Beware that some apply it differently. Some require 2 or more policies, and others 3 or more, and some apply it to all items you insure with them, while others only apply the discount to subsequent policies (I.E – only a discount on additional policies, not the first one).

Some insurers will offer a discount for driver training, and this can be quite generous (Club 4X4 offers up to 20% off for  off-road driver training on your 4X4 policy and up to 10% of your trailer policy if you’ve done towing training, through a Registered Training Organisation).  If you have completed this kind of training you could be eligible for a significant discount!

Other insurers offer discounts for being a member of an organisation.  It could be through your work, or even because you are a member of a 4WD club.  It is worth asking any potential insurer about this because it could be another 5% or so, and there isn’t really much you need to do.

  • What excess are you prepared to pay?

Taking a higher excess is another way to relieve premium pressure.  It means you have more to pay upfront in the event you need to claim, but it can be a way to reduce your premium if you really need to. Upping your excess during these times where vehicles may not be getting used as much, if not at all can be a great way to manage your premium until the dust settles (sorry, bad pun!)

  • Can you pay annually rather than by the month?

This is a really simple way to save.  Most insurance companies charge you more to pay by the month rather than annually, because believe it or not, there is a difference in claims incidence between these groups.  If you can find the cash to pay up front, you could save somewhere between 5 and 15% over the year.  Again, another thing to consider!

Beware the pitfalls

While the above can help provide some relief to your hip pocket, there are some really important things to ask yourself before you make any changes, to make sure that you make an informed decision here.

What is important to you? We’ve been conditioned by the insurance industry to care about price alone, but for most of us, price isn’t really the most important thing in the equation.; Value is.  While there is the old saying ‘you get what you pay for’, it is important that you don’t over-pay either.  Before you make any decision, you need to consider what value represents to you.

Does your sum insured reflect what your 4WD and everything on it would cost to replace if it was a total loss or stolen? This is making sure that you are adequately insured to replace your pride and joy if you woke up and found it had been stolen – this matters regardless of your choice of insurer.  It is very easy to underestimate what your 4X4 would really would cost to replace, so make sure that you know what this value is, and that you review the quote with the sum insured and that value in mind.  With current economic conditions, we might see an increase in thefts of vehicles and/or accessories, so now is a really great time to get your sum insured right so you don’t get burned if you need to claim.

Does your policy cover your mods and accessories?  This might seem like a repeat of #2, but bear with me.  The question here is does your policy cover all of your mods and accessories?  Most insurers will cover some of your accessories to a point (E.G – bulbar / roof-rack), but a lot of them will not cover ‘modifications.’ So if you’ve added a catch can, re-mapped your ECU, changed the suspension setup on your fourby, or done anything to the driveline, you’ve ‘modified’ it, or performance enhanced it, which may not be covered.  It is important to know your insurers position on this so you don’t get surprised if you need to claim, and you know what risk you are carrying personally if you choose to insure with someone who won’t cover all of your mods and accessories.

Do you have choice of repairer if you need to claim?

One way insurers manage premiums is to keep claim costs down.  The challenge with a 4WD though is it can be more complex to repair than a standard vehicle.  You might be able to find cheaper insurance, but the cost might be that you are forced to use the insurers’ repairer.  This could translate to re-work and inconvenience, not to mention frustration. Many of us will have a mate or someone trusted that has worked on our fourby’s, getting to choose who works on your vehicle might well be worth paying a little more for up front…

Time for a policy health check?

Now is a great time to review your current cover in light of the above, and make sure that your insurance is not only right for your needs, but that it works for your current situation.  You existing insurer should only be too happy to review your policy with you to see if you can make some savings, but it is also worth reaching out to a few others for a comparative quote too!

For more information visit CLUB 4X4.