Premium

A premium is the price of the risk the insurer agrees to carry. It starts from a base rate for your vehicle and is then adjusted — up or down — for every factor that makes your risk higher or lower than average: the suburb where the car is garaged overnight, the age and claims history of the drivers, the cover type and excess, and the security fitted. Two neighbours in identical cars can pay very different premiums because their driver and risk profiles differ.

Premiums are not fixed for life. They are recalculated at each annual renewal, and they can drift upward even after a claim-free year as the insurer updates its rates and your vehicle's risk data. This is why comparing the market at renewal matters — the spread between the cheapest and dearest insurer on the same risk is routinely 30 to 50 percent.

Paying monthly versus annually rarely changes the total much in South Africa, but a missed monthly debit order can lapse the policy and leave you uninsured at exactly the wrong moment. Keep the premium funded, and treat any skipped payment or "premium holiday" as a gap in cover, not a saving.