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Insurance for SMMEs: Cheap = expensive

Article provided by King Price Insurance

We’ve all, at some point, had the urge to listen to the little guy on our left shoulder telling us to cut corners, to take a short-cut on our way home, or to buy the cheaper brand for an immediate saving. ‘Who wouldn’t?’ we convince ourselves. Because let’s face it, we can all do with a bit of extra cash, and every little buck we save is another little buck. 

However, instant happiness due to a silly saving doesn’t guarantee long-term smiles. Cutting corners is sure to get you in trouble one day, and ‘cheap’ almost always means poor quality. The same goes for insurance policies. Some businesses underinsure, or worse, don’t insure at all, in an effort to save money, but this can leave them worse off.

Beat the bushes

Before choosing an insurer, make sure you’ve considered all your options. Shop around for an insurer and policy that will cover all your specific needs, and while comparing, be careful not to settle for the cheapest option as this won’t necessarily guarantee that you’re fully covered. Businesses have different needs, and while a certain policy might suit your competitor, it’s not guaranteed to suit you.

Excess

After the super friendly consultant manages to get your premium to a low monthly amount that you can afford, consider the excess you’ll have to pay if you have to claim. The lower your insurance premium, the higher your excess is likely to be. So, while paying low premiums might help you month-to-month, make sure you can afford to pay your excess, too.

A little extra

Sometimes lower premiums may mean that you’re not covered for the little (but essential) extras. In the case of your car, these may include 24-hour roadside assistance, having a rental car while yours gets sorted after an accident, and being covered for hail damage. These might seem like ‘nice to haves’ but without them you might find yourself spending a lot more in the long run.

Some cover is better than none

Third party cover is one cost you can’t afford to cut from your budget. If you, or an employee driving a company car, gets into an accident that involves another car, you should be able to rest assured that your insurer will pay for the damages caused to the other party. Car accidents are stressful enough; you don’t need the added stress of having to pay for someone else’s car repairs.

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