Choosing my car insurance (South Africa)

I have finally decided to buy a car and called up several insurers. This post analyses my choice to go
with the "Santam Direct" third-party, fire & theft insurance.
First of all I found comprehensive insurance too expensive: the premiums equal the payments on an equivalent car on a 72-month financing term. Instead, I will have to drive defensively and park carefully, and pay for my own lapses of judgement.

So, I got telephonic quotes on third-party, fire & theft (3FT or limited insurance) from the following:
  • Dial Direct - a 'direct' insurer
  • Budget - likely backed by another insurer
  • A&G via V-plus brokers (large commission, it appears)
  • Unity
  • Santam Direct
In the end I picked the Santam Multi-Motor package, which also had the lowest premiums. Oddly, "Santam Direct" as an entity is almost Google-proof. When I called Santam the operator had said "sorry we only deal with brokers, but we can put you through to Santam Direct", and put me through to 0860 444 444, which introduces itself as "Santam Direct". The lack of Internet presence may be cause for concern. Update: from a PDF on Santam's Int(ra/er)net what the operator referred to as "Santam Direct" may be a default broker to which non-brokers are redirected, a joint venture between Santam and Sanlam starting only this year. I will call tomorrow to find out more about this mysterious broker that I just bought insurance from. 

Santam has an older fee structure: low premiums, no "cash back", and high excess of R2500 plus endorsements: for example +R1000 for not having a tracker in a theft claim, for claiming in first 6 months, or for claiming 2+ times in a year, and +R1500 when someone else was driving (non-additive: simply choose the highest endorsement). Compare this philosophy to Budget and others having premiums about 70-75% higher than Santam, low excess (R700) and 10-25% "cash back" after 2-4 years.

My Reasoning: On Santam Limited Insurance (3rd party, fire, theft), one saves money by taking precautions to avoid having to claim. With Budget et al, premiums are higher while claiming is cheaper (less need for caution), but "to claim or not to claim?" is complicated by the Cash Back Bonus which is lost on claiming. That results in some messy risk calculations with which I do not wish to concern myself, and I therefore prefer low premiums up front. On claiming, I will view the Santam R2500-R4000 excess as paying in those additional premiums that I would payed anyway to a low-excess insurer. It might be called a "negative-cash-back because-you-claimed anti-bonus", which doesn't have the same ring as the "cash-back no-claim bonus" of the low-excess insurers, but the concept appeals to me.

Tracker. An additional option is a Tracker or similar device (Netstar, Bandit, CarTrack, Buddy, CellSecure, CellStop, C-Track, Matrix, DataTrack, NeoTrack, SkyTrack, SmartTrack). The "Retrieve" Tracker(tm) is normally R1450 installation + R142pm on month-to-month basis, or R185pm on a 36 month contract (month-to-month breaks even with contract at 33.7 months). For Santam clients, Tracker offers a R115pm x 36 month contract, which is R2520 less than the normal contract over 36 months, and removes the +R1000 "endorsement" of additional excess if the car is non-tracked when stolen.

Hippo Comparison: provided comparative generic E-quotes on 3rd party, fire and theft. The Santam telephonic quote was approximately one third of the DialDirect and Budget E-quotes (without Tracker). Without tracker, DialDirect and Budget telephonic quotes were about 65% of their own E-quotes. With Tracker, Santam was 60% of the E-quotes, and with tracker DialDirect and Budget were slightly higher than their E-quotes.

Deterrents: Security devices that require installation should be done by a VESA-approved provider. Various devices include "Alligator" steering wheel lock advertised as "even cutting in 4 places isn't enough", clutch pedal lock, wheel lock-nuts, gear locks, and gimmicks such as radio transmittors and SMS-sending devices to notify you when someone enters or starts the car (like bank login alerts), or a hidden fuse which blows unless you put the drivers' seatbelt on (latter could go really wrong). Mechanical barriers will slow down a team possessing a battery-operated angle-grinder by at most 10-15 minutes. Immobiliser units can also be swapped out in a couple of minutes, but the thieves need a specific unit to match the car model.

If one makes the car a difficult "15-minute job", and combines it with alerting on vehicle entry, that should give the local patrol cars time to get there before the thieves drive off. So Plan A is deterrence, Plan B could be alerting+barriers to give cops time to catch the thieves, Plan C could be Tracker, and Plan D is insurance. Plan E is moving somewhere with a garage. Alerting is tricky. Baseline would be an alarm siren. A custom device might use a short-range radio transponder (receiver beeps on activation), or set a mobile device to send an SMS alert. Lazyweb, what would you recommend? Or would an alerting device be overdoing it?

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