Gone Are the Days of Paper Works and the Physical Presence of Your Office

Today and years to come, we talk of the “internet of all things.” That means almost all businesses are done online, and insurance companies are not left out of this competitive edge. Therefore, it is possible to obtain a premium quotation online by filling a simple form that elicits information necessary to rate your risk exposure. If you are comfortable with the rate giving to you, by a click of a button, you can buy now pay later car insurance, and the relevant documents will be forwarded to you to download.

Social Domestic and Pleasure use only

The use of a vehicle is a key factor in risk assessment and determination of the premium. The social, domestic, and pleasure use is a restricted cover, and no other use is acceptable under this
policy. This is the cheapest auto insurance policy, and the premium is at a rock-bottom price. It is important to mention that if the vehicle is used for other purposes than that mentioned, the insurer is not liable and will repudiate any liability resulting from such use.

Method of Premium Payment

Well, it a good thing and the joy of insurance companies if a policyholder pays the annual premium in a lump sum because of the time value of money. By so doing, the insured is paying the actual premium agreed. Actually, there are other methods of premium payment, such as biannual, quarterly, and monthly. When you pay by these other methods, there is extra added to your premium based on the reason stated above. The monthly payment, for example, will attract about 10 – 25% addition to your premium payable.

Direct Marketing Insurance Companies.

Another mechanism used by insurance companies to attract and retain new customers is the direct marketing method. This is the process where the insurers sell their products and services directly to the public without going through the intermediaries (Agents and Brokers). Therefore, in view of the reduced acquisition cost of the underwriters, the fees that supposed to have been paid to the middlemen are passed to the customers in the form of discount or low premium. This is a powerful competitive weapon in the hand of the insurance companies in this segment of the market, to distinguish themselves and out-perform the competitors.

Pay as you drive

Of course, another dimension in the coverage offered by the insurance companies. This is meant for those who drive sedately and have a good driving habit. So many things are put into consideration in determining the premium payable, such as mileage, time of the day that you drive, speed, braking habits, and other factors. In order to achieve this purpose, you have to allow the insurer to plug a monitoring devise into your car or download their app into your smartphone to track your driving habits. Usually, up to 50% discount will be given to those customers that subscribed to this insurance cover.

As an addition to the above, a small sign-up discount is allowed by the underwriters. If your driving habits changed to risky driving behavior, the insurers would have no option than to apply a higher rate and increase your premium.

Membership of Associations and Organizations

The insurance companies do have the list of related associations and organizations to which they allow a discount for members of those associations. There is a need for due diligence on the part of the customers to ensure that the association they belong to qualify for a discount off the auto insurance premium. The National Military Family Association in the United States of America, for instance, has a 7 – 8% discount from the insurers that are tenable for their members. The ball is now in your domain, and you have to research to know the associations available in your country of residence and the discount allowable by the insurance companies operating in that economy.

Speedy Service Delivery

It is a good thing to have the offer of a low rate and premium from the insurers, but be warned; the cheapest may not necessarily be the best. It is important that you make further inquiries about your proposed insurance company. The areas to look into are, their cycle monitoring time (the time it takes to complete an action, example, response to an email received), complaints records of the insurer being an indication of disgruntled customers speedily claims processing and settlement, etc.

Power (C.C) to Weight Ratio

Motor vehicles can be defined as any mechanically propelled engines. And the power/capacity of the engine is referred to as cubic capacity (C.C) or horsepower. Therefore, the power to weight ratio is a mechanical term used to express the power of the engine in relation to the body-mass it has to pull. The cubic capacity is usually stated in the format of 1.3, 1.5, 2.0, 2.5, 3.0, and so on.

The interpretation of the above is that a 1.3 engine has smaller body mass to carry compared to a vehicle of 1.5 or 3.0 engine, and the propensity of causing severe damage increases as the engine capacity increased. Based on this reality, the insurance companies charged a lower rate for a small vehicle and a higher premium for high engine capacity.

Loyal Customers

Annual Loyalty discount is an instrument in the hand of the insurance companies to woo both existing and new customers. This discount is available after the first year of insurance cover.
It is a common slogan in marketing parlance that “keep the one you have while looking for new customers” The insurance companies spend a lot on advertising and publicity, and also the cost of acquiring new customers is increasing daily. Hence, the insurers deemed it fit to reduce the amount expended on the advertisement and pass the same to loyal customers as a discount.

The percentage discount may vary from one insurer to another, so you can find out what is obtainable in your country. Some insurers willingly give up to 10%.