Why car insurance premiums that never increase are so important

It’s great news, as a car insurance policy holder, if premiums never change. That means, in effect, that the insurance becomes cheaper over time, while rampant inflation continues unabated. Affordable car insurance is something that is sorely needed by South Africa’s uninsured motorists.

DISCLAIMER

Please read this article as only information, because car insurance is complicated. Rather see a certified financial adviser for professional advice should you want to buy car insurance.  

Let us examine some of the benefits of car insurance premiums that never change.  

CAR INSURANCE BECOMES MORE AFFORDABLE WITH TIME

Groceries and petrol keep on increasing in cost over time. Thus, fixed car insurance premiums, which become more affordable over time, will greatly assist policy holders, many of whom are struggling to keep a budget together.

Let us first examine the South African motoring scenario so that we can appreciate the importance of fixed premiums in that light. 

SOUTH AFRICA’S DIRE MOTORING SITUATION

At present in South Africa, only 30% of all motorists have car insurance, with the remaining 70% having no cover. According to a Wheels24 article of 14 February, 70% of about 12 million cars translates to 8.4 million cars that are not covered. Another way of saying it is that for every 10 cars you see on the road today, seven of them could very likely not be insured. This is quite a scary and sobering prospect for any driver, and should immediately spur you on to drive carefully and defensively. 

WHAT DOES THIS MEAN FOR THE CAR INSURANCE INDUSTRY?

With only 30% of car owners insured, motorists have a 70% chance of not being able to claim from a third party’s insurance in the event of an accident. This, in turn, places a huge financial burden on the car insurance company, because the policy holder will, most likely, have to claim for every accident, regardless of who is the guilty party.

IS THIS SITUATION LIKELY TO CHANGE?

An immediate and noticeable change could come into effect if third party insurance, which is the most basic kind of cover, is made compulsory in South Africa. Unfortunately, despite all efforts by the car insurance industry, there is still nothing in place. And so the desperate situation continues on our roads.

WHO MAKES UP MOST OF THOSE 70% UNINSURED MOTORISTS?

Although actual figures could not be obtained, could it be that many of the 70% cannot afford general car insurance, especially those products offered by traditional insurance companies? 

SO HOW CAN FIXED PREMIUMS ASSIST?

Seeing uninsured motorists can’t be ‘forced’ to buy third party car insurance through legislation, perhaps the other way would be to offer them insurance packages that appeal the most to their pockets. Through innovative research, car insurance companies can provide the motoring sector with affordable insurance by, for example, premiums that never increase. 

THE IMPACT OF AFFORDABLE INSURANCE ON THE 70% UNINSURED

We have highlighted the terrible current road situation in South Africa. The car insurance industry continues to make inroads into this huge number of uninsured motorists, by providing them with affordable, innovative products. Now we can see the importance of fixed premiums, which makes car insurance cost less over time. As more and more of these motorists start enjoying the benefits of affordable cover, this hopefully encourages the remainder to do the same. Perhaps, for those who won’t insure their cars irrespective of the cost, this will change their minds through exposure to educational programmes that stress the vital importance of having car insurance. 

PREMIUMS OF PMD’S AFFORDABLE CAR INSURANCE NEVER INCREASE

PMD’s car insurance premiums never increase, and this is good news for the average motorist who is looking for affordability. You can buy this insurance any time of the night or day online, using PMD’s Online Insurance Purchase Platform. You can complete the process in no time and without any difficulty. No need to call anyone except when you want to. Extra audio and video material is also provided to assist you. 

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