With a lot of auto insurance companies in South Africa that compete against each other, picking the best insurance package for your car can be challenging. This is especially true if you do not know about the factors insurers consider when determining insurance premiums. Making a buying decision based on price alone isn’t the way to go. You need to double-check on the basics like the benefits of your policy and whether the excess is fixed. To ensure you make the right choice, make sure to understand the factors below that impact your premium cost:

Voluntary Excess

When a car insurance provider puts together a quote, it will ask you to choose the amount of voluntary excess you want to pay when you make a claim. Increasing the amount you will pay in excess will help lower your insurance premium. But, ensure you can afford your chosen amount.

Your Car’s Market Value

Your premium will also be influenced by your decision whether to insure your car for its market value, trade value, or retail value. Insuring the vehicle for its market value leads to a lower premium since it’s lower than retail value. But, experts advise against insuring a car for a lower amount.

Where You Park Your Car Overnight

Where you live and park your car overnight can also affect your monthly insurance premium. You can lower your premium when you park it in a secure garage or install a kind of alarm or tracking device.

What You Use Your Car For

With the majority of insurance providers, you may pay a higher premium if your vehicle is used for business. In such a situation, you need to include coverage for either occasional business use or full business use, depending on how often you use your car for business purposes.

Kinds of Auto Insurance

Your monthly premium is also determined by the kind of car you drive. Comprehensive insurance from Miway is the most extensive but it covers you for hijacking and theft. Also, it covers any damage that results from weather conditions or accidents. You can also opt to buy third-party insurance but this only covers accidental damage you may cause to other cars in an accident.

When insurance companies evaluate your risk as a policyholder, they will look into your insurance history, driving history, and credit score. If you don’t want those unpleasant surprises when you make a claim, ensure you read your policy thoroughly and ask questions before you sign on the dotted line.