Dear Friend,

There’s no denying last year was a tough one. If like many South Africans you’re still feeling the bite of the credit crunch and are looking for ways to trim your monthly expenses, you’re not alone.

According to FAnews, “The fortunes of South Africa’s wealthiest individuals tumbled over the last two years, with the net worth of the country’s most wealthy individuals halving.” And because of this, one area that’s been identified as a means of reducing monthly expenses is on their insurance policies.

It makes sense doesn’t it?

When you add up everything you pay in insurance premiums every year – medical aid, car insurance, household insurance, etc. – I’m sure it makes you sick to your stomach.

So here are nine quick and easy ways to cut your short-term insurance bill and save yourself a bundle of money in the process.

----------------------------------------------------------------

Say “goodbye” to high premiums! These nine tips could help you cut 35% off your monthly premiums…

Tip #1: Act your age…
Personal risk is a huge factor. Insurance companies usually lump you into a group they expect to behave in a certain way. For example, if you’re under 25, you’ll pay far higher premiums on your car insurance because of your lack of driving experience. The same is true if you have a high accident toll blemishing your track record.

But the story works the other way too. In fact, if you recently retired, you’re probably a lower-risk candidate than you were in your 40s. Give your broker a call to check if you qualify for a saving on your premiums. Just one call could save around 35% per month.

Tip #2: Be a “safe bet”!
Insurance is all about risk. The riskier the proposition – the greater the chance of you making a claim, the higher your insurance premium will be. Luckily for you, this also means you can usually bring down your insurance premiums by showing your insurer that you’re a relatively “safe bet”. And it’s not hard to do…

For example, parking your car in a locked garage (rather than in your driveway) means it’s less likely to be stolen; and your insurer should reduce your premiums accordingly. Moving to a smaller property with high security and 24-hour access control will also help. This will make a considerable difference to your cost of insurance. In fact, you could save 30% or more on household goods cover just by doing so. Even if you’re not interested in packing up and moving house, ask your insurance broker what you can do to increase your home’s level of security and acting on that advice will put money back in your pocket.

Tip #3: Make an album
Instead of getting an evaluator in, go through your home, room-by-room, and create your own photo inventory. Record the make and model of the object and include the picture. Then send the inventory to your insurance company and adjust your premium accordingly. This way, should thugs burst into your house and steal your stuff, you have proof you owned the item.

Tip #4: Consolidate and “go the distance”
You can often reduce comprehensive car premiums by up to 25% by including household goods insurance into one overall policy. Long-term policy holders often receive special rates and get better service. This relationship also gives you a good leg to stand on when negotiating a lower premium.

Tip #5: PAY more and you’ll SAVE more
Opting for a voluntary excess of R1,000 in your car insurance, for example, could save you R500 a year. When it comes to household goods insurance, a voluntary excess of R2,000 could save about R800 a year.

Tip #6: Changed jobs? Tell your broker…
If, for example, you’re a sales rep and you no longer use your car to drive around from client to client, move the car down from a high-risk to a medium-risk category. Lower-risk means lower premiums.

Tip #7: Don’t over insure a depreciating asset
It makes sense to take out a comprehensive car policy when a car is brand new and for the first few years after that. But as it gets older, it often makes sense to change the cover to “Third Party, Fire and Theft”. After all, every year your car spends on the road reduces its value significantly.

Tip #8: Don't forget about your “no claims” bonus
Not claiming for a small financial loss could mean a long-term gain. Weigh the pros and cons of claiming carefully. If you claim for an insignificant amount – like a broken window – your premiums go up and you’re also likely to miss out on your “no claims” bonus for the year.

Tip #9: Make sure you list your items according to what they’re worth
Don’t insure your car radio – it’s just not worth it. Instead, list it as “specified” item in your policy. Typically, on a comprehensive motor policy, the maximum amount they’ll pay you out on a claim for car-sound equipment is R1,000 or 5% of the amount insured (whichever is greater). If you’ve got super sound, this represents a net loss – hardly music to your ears.

In the name of happiness,

Your Insider

For more wealth-building, health-boosting secrets…

• Three vital things to consider when funding your golden years
  
• Ant problems? This common ingredient will send them packing
  
• Want to achieve your dreams? Break these seven habits today...
  
• Forgotten where you put your keys? Kick start your memory with these 11 super foods