12 Ways to Save More on Car Insurance

When it’s time to shop for Auto Insurance, you need to be able to make well informed decisions so your can spend your money wisely. Here’s 12 tips on how to shop for your car insurance – and SAVE!
One Company, Multiple Policies – Do you have a homeowners or renters insurance policy? If so, is it with the same insurance company that provides your auto insurance? If the answer is no, you may be paying too much – for both policies. Almost every insurance company that sells auto insurance wants its policyholders to also buy homeowners or renters insurance from that company. Usually, these discounts are at least 10% and some insurers apply the discounts to both the auto and the homeowners/renters policy.
*TIP: Talk to your agent about multi-policy discounts.
Good Driver, Good Price? – It’s no secret that the better your driving record, the less you will pay for auto insurance. But did you know that most people qualify as "good drivers" and are eligible for discounted premiums? Some good drivers pay a lot more than others, however. If you have a spotless driving record, there’s no reason you shouldn’t pay the lowest price a insurance company has to offer.
*TIP: Make sure you’re getting the best discount for your driving record. Talk to your agent. And remember, be a safe driver. It will save you money.
Discounts for Taking Mass Transit – Do you drive to and from work? If you do, you are literally paying a premium to do so. Insurance companies charge you significantly higher premiums if you drive to work. And, the longer your commute (in miles, not minutes), the higher the premium.
*TIP: Some drivers should consider mass transit. Remind your agent that you are NOT driving to work so you receive the appropriate discount.
Low Annual Mileage, Lower Price – On average, people drive 1,000 to 1,250 miles a month. That is what insurance companies consider average use.
*TIP: If you drive less than the average, you could be eligible for low-mileage discounts.
High-Profile Vehicle Means Higher Cost – The type of car you drive is a major factor in what you pay for insurance. Is your vehicle a magnet for thieves? Is it more expensive to repair than most cars? If the answer to either of the last two questions is yes, you’re paying more than the average car owner for insurance.
NOTE: To get detailed information on any vehicle(s) – contact the Insurance Institute for Highway Safety.
Raise Your Deductible – The deductible is the amount you pay before insurance kicks in if you have a claim. The lower the deductible you choose, the more you pay. If you have assets, you can probably afford to absorb at least $250 and probably $500 if you have a claim.
*TIP: If it’s been years since you've been in an accident, you may be better off raising your deductible and paying less each year for insurance.
Drop Unnecessary Coverage – Let’s say you have an older car, one not worth very much. There’s really little point in having collision and comprehensive coverage. You don’t have much to protect. Remember, too, that you have to subtract your deductible from any potential payout you might get.
*TIP: As a general rule, any car worth less than $1,000 shouldn’t have collision and comprehensive coverage. The cost of the coverage is probably greater than the benefit. How much is your car worth?
Discounts, Discounts, Discounts – Auto insurance companies offer several discounts for a variety of reasons. The car has automatic seat beats, air bags, anti-lock brakes, anti-theft devices, etc. The driver is a good student, which is especially valuable if you have teenage children who will be on your policy.
*TIP: Make sure you are taking advantage of all the discounts available to you! Ask your agent if there are any discounts that you are NOT currently receiving.
Taking a Drivers Training Course – Many insurance companies also offer discounts to those who have taken driving courses recently. If you have taken one or were thinking about it, make sure you tell your agent.
Low-Cost and High-Cost Areas – Are you planning to move? If you are, you should take into account the cost of insurance. Generally, the more urban the area, the higher the premium. The costs can vary even within a community.
Credit Where Is (Or Is Not) Due – Is your credit record better than your driving record? If you have a good credit record, you could be eligible for discounted premiums from several auto insurance companies.
FACT: Many insurers now use your credit history as a major factor in determining what to charge you for auto insurance. In some cases, you could save money by shifting your business to an insurer that uses credit as a rating factor – even if you have a so-so or poor driving record. You should talk to your agent to make sure you have the best situation given your credit record, good or bad.
One Call is All it Takes Sometimes – Every so often call your agent. Ask if there are ways he can reduce the cost of your auto coverage. Many times, if an agent doesn’t hear from a client, they will assume the client is satisfied. Whatever your driving record or coverage needs, you should shop around for the best deal for you. There are literally thousands and thousands of coverage options from hundreds and hundreds of insurance companies.
In addition, not only should you try to get the best deal you can, you also need to make sure you have all the coverage you want and need. Using an experienced, personal insurance agent is usually your best bet to get the most value for your auto insurance dollar.

The Bob King Agency takes a personal interest in our customers. We like to share important information to help you protect yourself and your family from financial loss. If you have any questions, regarding this information or your insurance coverage, please contact our office today. www.BobKingAgency.com

Microinsurance framework may give brokers right to employ agents

Chuks Udo Okonta

The microinsurance framework being developed by the National Insurance Commission (NAICOM) may give insurance brokers the right to employ agents as sellers, Inspen has learnt.

A broker, who pleaded not to be named, said the broking fraternity has written the industry regulator to consider brokers’ desire to engage agents in the framework which will soon be released.

The source said: “We have written NAICOM trying to bring out the possibility of brokers employing agents that would work for them. It is a good thing in the right direction. The brokers never understood in the beginning when NAICOM introduced the agency system. It is now that we have gotten full understanding of the initiative, and we have written NAICOM, to reconsider our stand on employing agents to work for us.”

In a bid to enrich the framework, NAICOM together with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ); Making Finance Work for Africa (MFW4A; Munich Re Foundation; Nigerian Insurers Association (NIA) and the Microinsurance Network, will be organising an international Microinsurance Conference to unlock the over N60 billion untapped business opportunities.

 

 

The conference is scheduled to hold on September 10 -11, at the Transcorp Hilton Hotel in Abuja.

 

According to NAICOM, the event will be an incubator of new ideas where the key stakeholders of the Nigerian insurance sector and related parties discuss approaches for promotion and practical implementation of microinsurance.

 

The commission noted that sessions will be designed to focus on future developments and how issues, lessons learnt and international best practices can be adapted for Nigeria, adding that the conference will provide: An opportunity for policy makers, private sector innovators, representatives from civil society and technical assistance providers to network with their peers, discuss their experience, exchange knowledge from good practices and discuss innovative approaches to promote microinsurance in Nigeria.

It said the confab will be a market place to showcase innovative ideas, tools, expertise and initiatives to support development of the Nigerian insurance sector and to match demand and supply; and presentations of activities and achievements in the development of microinsurance in Nigeria and around the globe.

South African life insurer eyes Nigerian market

Chuks Udo Okonta and agency report

Another South African company Liberty Holdings is set to berth in the Nigerian Insurance market, Inspen has learnt

Its Chief Executive Bruce Hemphill, who disclosed this during the life insurer’s interim financial results presentation in South Africa, said the company was in the process of entering the asset management and life insurance markets in Nigeria.

Hemphill said the company was still in the process of setting up these businesses in Nigeria. He said Liberty expected the entry into insurance and asset management to boost its medical scheme administration business, which had not done well since launching on the Nigerian market in 2009.

Once these operations were up and running, Liberty planned to expand the corporate product offering of the health business.

“While the opportunity for the asset management industry in this market is very clear, we believe there is a sizable opportunity for Liberty in long-term insurance,” Hemphill said.

He explained that Liberty saw enormous growth opportunities in its chosen African markets because of the economic growth rates, adding that this boded well for the expansion of the higher end of the consumer market, where the company had been gaining most of its market share.

Liberty caters for retail clients earning between R8 000 and R50 000 a month. Since 2010 it has been growing its market share consistently in South Africa.

Hemphill said by leveraging on its multi-distribution channels, Liberty expected to take further market share. “The market in 2010 felt that our traditional business was in decline and that we were not going to achieve further growth but it’s clear that there has been growth and by expanding our products in Africa we’ll take it further,” he said.

Liberty’s increasing market share has been supported mostly by the innovative products that the company has introduced, such as its new generation Evolve range of investment plans, which has attracted R2.2 billion of funds since its launch in the fourth quarter of last year. In the six months to June, Evolve’s product sales stood at R1.4bn.

Liberty’s insurance operations in the rest of Africa generated headline earnings of R18 million in the six months to June from a restated loss of R5m a year earlier.

The new business margins for long-term insurance in the rest of Africa increased to 11.3 percent from 7.7 percent in the previous corresponding period.

Jean Pierre Verster, an analyst at 36One Asset Management, said Liberty’s insurance and asset management businesses should be more successful in Nigeria than the health business because the company would benefit from the relationship it had with Standard Bank, which was already a significant player in that market.

Justin Floor, an investment analyst at Kagiso Asset Management, said that Liberty remained geared to markets that he believed were at elevated levels and that its longer-term success was very dependent on its ability to execute various growth strategies in Africa, the South African emerging consumer market and the direct marketing segment.

As Liberty increased its market share, Floor said sustaining this would be a critical driver of future performance.

In the six months to June, the company increased its operating earnings by 31 percent to R1.04bn.

Long-term insurance net cash flows were up 81 percent to R2bn. Long-term indexed new business insurance sales of R3.1bn were 12 percent higher year on year. Black economic empowerment normalised headline earnings a share were up by 6 percent to R6.03 and the company declared an interim dividend of R2.12 a share, 10 percent higher than last year. The stock fell 2.94 percent to R119.

Watch out for fake car insurance

By Wendy Knowler

The long wait: This damaged Toyota RunX, belonging to Aarvarn Rajcoomar, was subsequently repaired by a panel beater, but Model Insurance failed to settle the bill.

Many people assume they will be "covered" if they have an accident in their car, or if the car is stolen or hijacked, when in reality they are violating a key provision of their policy which will see any claim being rejected by their insurance company.

Things like the car being unroadworthy, having failed to disclose a previous accident when taking out the policy, or not being the "regular driver" listed in the policy.

But here’s an even worse scenario – what if the insurance company you’re paying your premiums to every month is just pretending to be an insurance company, treating clients’ premiums as pure income, going through the motions of claim approval and then just not paying?

That’s the story of Model Insurance, based in Pinetown, KwaZulu-Natal. They have been in operation since at least 2011, offering low premiums and incentivising existing clients to refer new clients to them.

The company’s website claims: "We offer by far the lowest car, motorcycle and business insurance premiums, so why pay more when you can pay less, save money today and make a difference in your life. We can help."

In fact Model Insurance, owned by Pieter de Wet, was never a bona fide insurance company. And the difference the firm made in the lives of those who claimed, and the lives of many panel beaters, was indeed big – but not in a good way, in most cases.

On hold: Liz de Gee of Bruces Panel Shop in Pietermaritzburg, with the Nissan Tiida of Model Insurance client Sharon Prince. The company owes more than R40 000 for the repair.

Independent Newspapers

Complainants say the company didn’t quibble about or reject their claims – they made all the right noises, but then just failed to pay.

Model Insurance has never been registered with the Financial Services Board, as required by the FAIS Act, and is not underwritten by a registered insurance company, and has therefore been conducting business in contravention of the Short-Term Insurance Act.

Acting on complaints, the Financial Services Board referred the matter to the SAPS for investigation.

Police spokesman Colonel Jay Naicker says the company has or had 884 clients around the country, and their premiums, paid into Model Insurance’s bank account via debit order every month, ranged between R200 000 and R250 000.

"There is no indication that the money has been paid to an insurance company," Naicker said.

Investigating officer Lieutenant-Colonel RR Mohan has taken six statements from victims, who have not had their claims settled – including several in KZN, one in Pretoria and one in Port Elizabeth – with another four pending.

"We are in discussion with prosecutors on how we can proceed with this matter," Naicker said. "Any other victims out there, or those who can assist police in their investigation, are requested to contact Lieutenant-Colonel Mohan on 079 5000 074."

I last spoke to De Wet, and his mother, Ria – an employee who "lodges claims" – as she put it, early last week in connection with the case of Sharon Prince. (See Case 2.)

That was before I learnt of the police investigation into his business, but I have not been able to reach him by phone since. The office number rings unanswered, and my e-mails have not been responded to.

De Wet admitted the company was not registered with the FSB, adding that it was going to be liquidated "in about five months".

He appeared unrepentant about the failure to pay claims, saying he had a long list of payments to make, that people had to wait their turn, and he had a family to think about.

He blamed the firm’s woes on false reports and a vendetta against the company on the internet – there are several complaints about Model Insurance on consumer complaints website HelloPeter – saying he’d lost "over 700 policies" as a result.

In March 2012, the SA Motor Body Repairers Association sent an e-mail to members urging them not to release repaired vehicles authorised by Model Insurance until the company had made payment.

This was as a result of complaints from the association’s members about non payment of claims by the "insurance company".

CASE 1: Aarvarn Rajcoomar

Newly graduated, Rajcoomar bought his car, a 2005 Toyota RunX, in April 2011 and took out a policy with Model Insurance on the recommendation of a colleague.

"I did my research on them but at that stage there were no complaints on the internet," he says."I was swayed by the fact that they were associated with the Automobile Association, giving their policyholders free AA membership and roadside assistance."

But a few months later all policyholders were informed by Model Insurance that the company was no longer associated with the AA, and that they could use any towing service after an accident.

Rajcoomar’s accident happened in April last year. While travelling in the Ladysmith area, his car was side-swiped by an SUV, the unlicensed driver having lost control on a bend at high speed.

He submitted the claim to Model Insurance, the repair was authorised on May 8, with a promise to pay in 30 days, and carried out by Concorde Panel Beaters. Five months later, Model had still not made the payment.

"Hundreds of calls to the insurance company got me nowhere; they kept saying that they were working on it and that they would pay at the end of the month, but this never happened."

Concorde refused to release the car until they were paid, and began talking of selling it to defray costs.

"In October 2012 my father went to Model Insurance’s dodgy looking basement office in Pinetown to meet Pieter de Wet on my behalf. He said they were having a hard time financially as panel beaters were not releasing clients’ vehicles until they paid. He said they had many clients waiting for their vehicles, and thus there was a shortage of funds, strongly implying that the panel beaters were in the wrong."

Letters sent by Rajcoomar’s uncle, an attorney, to Model were ignored. Finally Rajcoomar borrowed R25 000 from a relative to pay Concorde and get his car back.

"Today no one from Model Insurance answers my calls or replies to my e-mails," he says. "In fact, they didn’t even respond to my policy cancellation and have since debited my bank account several times, which I have reversed.

"I am now seriously in debt, which is going to take me years to recover from."

CASE 2: Sharon Prince

Sharon Prince, who’s from Durban but is working as a trainee supermarket manager in Pietermaritzburg, got her first car, a Nissan Tiida, in 2011.

She took out a premium with Model Insurance based on their premiums being low and a friend having recommended them, and began paying about R450 a month.

Last February the car was badly damaged in an accident. Prince contacted her insurer, submitted the relevant paperwork and the claim was approved.

The car had been towed to Bruce’s Panel Shop in Pietermaritzburg and on March 9 Model Insurance wrote to the panel shop authorising R45 000 worth of repairs.

Model was to pay Bruce’s Panel Shop R41 750, and Prince, as the policyholder, the excess of R3 250.

By early April the car was repaired, and Prince paid that excess amount. But Model Insurance just never paid.

"They never said they wouldn’t. They kept saying they would… next week, next month… for 16 month now!" Prince says.

As Liz de Gee of Bruce’s Panel Shop had been warned about Model Insurance by the SA Motor Body Repairers Association, she wasn’t prepared to release the car without getting payment first.

"We feel desperately sorry for Sharon, and I have never given up trying to get the money out of the De Wets, we can’t afford not to be paid for the car," she said.

Prince had to walk to work in the dark and cold of winter, and finally bought another car, having been unable to get a personal loan to pay the R42 000 she owed the panel beaters.

That car is costing her R3 500 in repayments, which has put paid to her plan to buy a flat.

Pieter de Wet appeared unmoved by her story when I confronted him with it last week.

He undertook to "sort it out", then contacted De Gee and offered to pay R20 000 on October 5, and the balance on November 5.

She refused, given that all the De Wets’ promises to pay since last April have come to naught, not a single cent has been paid, and now there’s talk of liquidation.

She demanded a payment of the full amount immediately.

De Wet, however, claimed the moral high ground for making an offer which was rejected.

WHAT TO DO


A red flag number one when considering car insurance: a very low premium. Check out the company’s credentials first, starting with FSB registration.
Then go on to the Ombudman for Short-Term Insurance’s website and look at claims statistics.

The Ombud’s office this year revealed how the 51 competing insurers dealt with their claims in the preceding year. Their claims statistics were laid bare in the Ombud’s 2012 annual report, including the number of repudiated claims which the office overturned in favour of the consumer, for each company. To see all the stats, go to www.osti.co.za and click on Annual Reports, 2012.

Before committing to a car insurance policy, read the small print, paying particular attention to the excess amount and the exclusions.

Source: IOL service

Liberty plugs gaps in Nigerian offering

By Londiwe Buthelezi



Liberty Holdings was in the process of entering the asset management and life insurance markets in Nigeria, chief executive Bruce Hemphill said yesterday during the life insurer’s interim financial results presentation.

Hemphill said the company was still in the process of setting up these businesses in Nigeria. He said Liberty expected the entry into insurance and asset management to boost its medical scheme administration business, which had not done well since launching on the Nigerian market in 2009.

Once these operations were up and running, Liberty planned to expand the corporate product offering of the health business.

"While the opportunity for the asset management industry in this market is very clear, we believe there is a sizable opportunity for Liberty in long-term insurance," Hemphill said.

He explained that Liberty saw enormous growth opportunities in its chosen African markets because of the economic growth rates, adding that this boded well for the expansion of the higher end of the consumer market, where the company had been gaining most of its market share.

Liberty caters for retail clients earning between R8 000 and R50 000 a month. Since 2010 it has been growing its market share consistently in South Africa.

Hemphill said by leveraging on its multi-distribution channels, Liberty expected to take further market share. "The market in 2010 felt that our traditional business was in decline and that we were not going to achieve further growth but it’s clear that there has been growth and by expanding our products in Africa we’ll take it further," he said.

Liberty’s increasing market share has been supported mostly by the innovative products that the company has introduced, such as its new generation Evolve range of investment plans, which has attracted R2.2 billion of funds since its launch in the fourth quarter of last year. In the six months to June, Evolve’s product sales stood at R1.4bn.

Liberty’s insurance operations in the rest of Africa generated headline earnings of R18 million in the six months to June from a restated loss of R5m a year earlier.

The new business margins for long-term insurance in the rest of Africa increased to 11.3 percent from 7.7 percent in the previous corresponding period.

Jean Pierre Verster, an analyst at 36One Asset Management, said Liberty’s insurance and asset management businesses should be more successful in Nigeria than the health business because the company would benefit from the relationship it had with Standard Bank, which was already a significant player in that market.

Justin Floor, an investment analyst at Kagiso Asset Management, said that Liberty remained geared to markets that he believed were at elevated levels and that its longer-term success was very dependent on its ability to execute various growth strategies in Africa, the South African emerging consumer market and the direct marketing segment.

As Liberty increased its market share, Floor said sustaining this would be a critical driver of future performance.

In the six months to June, the company increased its operating earnings by 31 percent to R1.04bn.

Long-term insurance net cash flows were up 81 percent to R2bn. Long-term indexed new business insurance sales of R3.1bn were 12 percent higher year on year. Black economic empowerment normalised headline earnings a share were up by 6 percent to R6.03 and the company declared an interim dividend of R2.12 a share, 10 percent higher than last year. The stock fell 2.94 percent to R119. Additional reporting by Reuters




Source: Business Report

Short-term insurers facing a tough business cycle

By Phakamisa Ndzamela

THE days of cutting premiums to attract customers could be coming to an end as South Africa’s short-term insurers, especially the motor insurers, face a tough business cycle.

However, with consumers under increasing financial pressure motor insurers will have to carefully considered measures to benefit their bottom lines, such as rises in premiums.

A clumsy increase in premiums could run the risk of reducing the number of clients that can afford adequate and comprehensive cover. An insurer could also lose its clients to other players.

With tough operating conditions prevailing in the market, the short-term insurers are likely to manage claims much more efficiently. Insurers may also be prompted to scrutinise claims more closely.

Short-term insurers Santam, Mutual & Federal and Lion of Africa have all reported weaker financial results in the first six months of this year.

Santam posted an underwriting margin of 1.3% in the period to end-June 2013 compared to 6.1% in the period to end-June 2012. The June 2013 result was far below Santam’s underwriting margin medium-term target of 5%-7%.

Underwriting margin is a key measure of financial performance in a short-term insurer.

Rival Mutual & Federal also posted a weak set of results in the six months to end-June. Mutual & Federal posted a negative underwriting margin of 2.7% and an underwriting loss of R118m.

Santam, however, posted underwriting income of R102m.

A company incurs an underwriting loss when it has huge claims and expenses compared to the premiums it collects. This can be caused by higher claims inflation and a weaker rand.

Absa Financial Services, which deals in insurance, posted an underwriting loss of R52m in the six months to end-June, due largely to weather-related claims.

Lion of Africa, which is 100% owned by Brimstone, had a weak underwriting result, posting a loss of R47.7m in the six months to end-June compared to a profit of R5.5m in the previous period.

The market is already anticipating that players such as Discovery Insure will likely report subdued numbers.

Some analysts believe the difficult conditions are likely to continue for the next 12 months.

Over the past six months South Africa’s short-term insurers have been hit by a weak rand and a higher frequency of claims, which are increasingly becoming more expensive.

Motor insurers have to import some car parts from overseas markets and the weaker the rand, the more expensive it becomes.

The rand has depreciated by close to 20% against the dollar this year, hurting motor insurers.

Santam indicated in its results last week that it was also affected by a rise in theft-related claims.

Short-term insurers have also had to pay out claims to agricultural clients who suffered damage from hailstorms and drought.

"I think we are going to have another year of weak margins in the short-term insurance industry," an analyst based in Johannesburg observes.

"The insurers can’t increase premiums fast enough. There is a lot of competition, you have a lot of direct insurers in the market. The consumers are also under pressure. They can’t afford expensive premiums."

South African consumers are battling higher levels of debt and rising electricity and energy prices. Lenders have also pulled back on the levels of credit that they are prepared to advance.

Byran Taljaard, an insurance analyst at Avior Research, says what has made it difficult is the fact that a weakening rand coupled with catastrophes and higher costs per claim have all hit at the same time. "The next 12 months will be tough. The risk is the rand because it has an impact on motor vehicle parts," Mr Taljaard says.

He points out that it is difficult for insurers to hedge the rand against a decline. It also poses a risk if one gets the hedge wrong.

He says the short-term insurers that are likely to suffer in this difficult underwriting cycle are those that are cutting premiums in order to get new business.

Bigger insurers are in a much better position in this market as they have bigger balance sheets.




Source: BusinessDay

IFRS: Brokers adopt single template

Chuks Udo Okonta

Insurance brokers under the umbrella of Nigerian Council of Registered Insurance Brokers (NCRIB) have adopted a unified International Financial Reporting Standard (IFRS) template to enable them have a seamless transition and possibly forestall the challenges presently faced by some underwriters in getting their 2012 accounts approved.

President of the NCRIB, Mrs Laide Osijo, in a telephone interview, exclusively told Inspen that the NCRIB has engaged IFRS experts to develop a unify template that members would all adopt in preparing that 2013 accounts.  

Brokers according to IFRS guidelines issued by the National Insurance Commission (NAICOM) are to prepare their 2013 accounts with IFRS requirements.

 Osijo noted that brokers are assiduously working hard to have a seamless transition, adding that some brokers have aligned their accounts with the IFRS. She said the adoption of a unified template would enable brokers produce their accounts at an affordable cost.  

She said: “We are really preparing for transition to IFRS. The NCRIB as a secretariat is IFRS complaint. Our 2012 and 2013 accounts will be prepared in line with IFRS requirements. We have gone through trainings and our accounts have been prepared accordingly. For members’ accounts, we have set up an accounting committee that is working with an external consultant to develop the template that we will use. We are trying to conform to the training we had with NAICOM. Some of the big brokers and few small ones in their personal rights have complied. Like my company we have complied.

“The companies that have complied selected the templates that suit them, but we want a unified template that will be attested to by NAICOM, that will make it economical and cost effective for all brokers. For if we allow brokers to do it individually, it will be costly, we want to do it as a group using one template. And we are seriously working on that.

“Note that our transition will start with 2013 accounts; we are prepared, for we would not want to experience what some underwriters are passing through at the moment.”