Auto Insurance, Best Buy Techniques
What's your statistic?
When buying an auto insurance, you are nothing more than a statistic. To an insurer, you are not a person, you are a set of risks. An insurer bases his premium or its decision not to insure you at all on your "risk factors" including something that may seem unrelated to driving a car such as your age, occupation, and how you live. Take your age for example, most insurers have standard set of rules that entitle drivers for lower rates:-
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As for the types of cars that you drive, will also determine the level of your insurance premium as follows:-
It goes without saying that cars that cost a lot to repair such as European imports, will cost more to insure than say a Honda Civic. But having said that certain makes that are popular with thieves (especially in Cambodia) will also cost more to insure. Apparently, the current most frequently stolen cars are SUV and Off-Road vehicles. This is where you will save money on your premium if you have certain security system installed in your car.
Some insurers also offer discounts to drivers with less than the average number of miles per year. However, certain group of professions such as singers and actors may have to pay more to get their cars insure because of their extensive travel schedules and life styles.
The same with anything else you buy, what seems to be the same product can have different prices from different companies. This is where you can save money by comparison shopping. However, to many car buyers, this is not an option because the financial institutions that handle your auto loans have already "selected" a set of insurance companies for you.
Buying auto insurance in Thailand falls into four main categories:
1. Mandatory by the financial institutions that grant auto loans to you.
2. Free auto insurance that comes as part of sales promotion
3. Voluntary by comparison shopping yourself.
4. Fleet insurance via brokers or agents.
If you fall under the first category, it looks as if you hands are tied and quite often you are getting a pretty raw deal from the insurance companies. This is because it is the car dealers that choose an insurer and buyers are given a choice of 3 insurers to choose from at best. In this situation, make sure that you ask to see the terms of all the insurers on the list. Very rarely will the financial institutions that grant you the loan for your car allow you to use an insurer outside their preferred list.
As for the second category, just grab what you can as long as it's free. Due to the intense competition among the car dealers, free auto insurance (at least for the first year) is often included as part of the promotion. The fourth category is mainly for big companies with fleet of cars, vans or trucks and the process is normally done by competitive bid via brokers or agents. As for the third category, this is where we will show you how to get the best deal from your insurer.
Maximizing your savings
You can't change many of your risk factors such as your age or the types of cars that you drive but save money by taking advantage of the following tactics:-
Combine Coverages
As with any other products, it is cheaper for insurance companies to sell more to one customer, so if you have more than one car in the house, insurer will give you special discount if you insure all your cars with a single company.
No Claim Bonus
A clean driving record keeps your premiums low and frequent claims are red flags for insurers. Some won't renew policyholders with more than two major claims in three years. So try to carry more of the risk yourself by paying for minor repairs out of your own pocket. The no claim bonus can be as much as 50% for clean driving record as follows:-
Years No-claim Bonus
1st year 20%
2nd year 30%
3rd year 40%
4th year 50%
Deductible
The average driver files a collision claim once every three years and a major claim once every 10 years. Therefore, if you are confident about your driving record, increasing a collision deductible on your auto policy to say Baht 5,000 (meaning that you pay for the first Baht 5,000 on any claims) can save you quite a lot on your premium.
Designated Drivers
By naming only limited number of drivers to one car can save you money on your policy and if you have several cars in the house with teenage children, put them on to your least expensive car and make sure they only drive that car.
Picking An Insurer
"Insurance is a product you buy, but hope you never need".
Look at service
This is sad but true. When you really need them, the company you've paid to protect you can become your adversary. While it is the insurance job to restore you financially, but disagreements often occur regarding claims and services.
No amount of discount in the world will make up for the slow claims processing or poor repairs, so find out as much as you can about a company's service record before you sign on. Although, in Thailand, there are no Consumer Reports on service ratings of large insurers but an ISO certification can be a useful guide on the quality of services.
Financial Security
The same with life insurance business, the top 6 out of 72 companies control almost 70% of the market share. But many of the biggest companies by market share are not listed, therefore, it is more difficult to assess their financial status. Although, all insurance companies are regulated by the Ministry of Commerce but it's wise to look at the registered capital of your auto insurer.
Claims
Don't compromise on quality. A garage in your insurer's network may fix your car faster than others because you won't have to argue over repair costs. However, because of their mandate from the insurer to keep costs low, they may cut corners on quality. Therefore, watch out for "generic" spare parts. Especially if you drive a fairly expensive car, always insist on the original equipment manufacturer before you authorize the repair.
Lastly, information is your best protection. After a car accident, take down the names and license numbers of all drivers involved and identify any witnesses. Take photos if possible and call your insurer as soon as possible