“I pay my insurance every month for years and when I claim once, you push up my premium.” Said every client ever. We understand that there might be misunderstandings surrounding this topic and, in this article, we will be looking at what the effect of claiming has on your premium as well as some ways in which you can prevent the increase of your premium.
When you put in a claim, that picture obviously changes. Instead of seeing your new premium as an increase, you should be seeing it as what you would have been paying all this time had we not rewarded you for not claiming. The second part you need to remember is that once your premium is adjusted, it does not mean you will never again reach that lower premium. In a year’s time with your next renewal, we will obviously have a look at where we can reward you as a client and lower your premium.
Your next question should be “How do I prevent my premium from going up?”. The answer to that question is also relatively straight forward. Do not claim unnecessarily. If your windshield has a little chip in it, don’t claim the R300 it is going to cost you to fix it. That specific claim might not influence your premium, but it influences your claiming frequency which reduces our grounds to negotiate for better premiums with the insurers. A simple calculation to see if it is worth claiming is to take that increase in premium and multiply it by 12 months. If that increase over 12 months is more than the value of the actual item, you can consider claiming for it. Otherwise, you might want to consider covering that loss yourself.
We hope that we have shed some light on topics that aren’t always straight forward for people who do not work in insurance, if there is something you are not sure about, it is always best to first contact your broker instead of rely on your own understanding.