How to reduce your risks
UNDERSTANDING how insurers determine automotive risk can help you to lower your risks, and potentially reduce your insurance premiums, says Kaysia Johnson Vaughn, manager, marketing and sales, at JN General Insurance Company (JNGI).
Insurance provides protection for the value of things which are important to you, she pointed out. To calculate the appropriate cost of insuring a motor vehicle, insurers must assess several factors to determine the risk involved in providing coverage for your asset.
"Your age and driving history will affect how much you pay for auto insurance," Mrs. Johnson Vaughn said, "because a new, less experienced driver is generally more likely to have an accident than a more experienced one, and young drivers, particularly males, tend to take more risks than older persons."
Johnson Vaughn told a financial sector audience at a conference, held in Kingston recently that the age and experience of a driver are set, but other factors may be more amenable to change.
One such is the value of your vehicle, and she said, "It may appear contradictory, but expensive vehicles are proportionally less risky to cover."
"Thieves find them less appealing as they are looking for cars with spare parts that are readily available," the manager pointed out. "Owners are also usually more careful with their luxury vehicles than with a less expensive run-about."
Another factor to be considered is the age of a vehicle, as purchasing replacement parts tends to be more difficult for older vehicles. Therefore, providing insurance coverage for a newer, more popular vehicle, is regarded as less risky, as repair costs would be lower and more easily quantifiable.
"The ability to properly secure your vehicle is taken seriously by insurers," she declared.
"Kill switches can immobilise a vehicle, and alarms can deter unauthorised persons from accessing it, but keep in mind that these devices only have value if you actually use them."
Several companies also operate Global Positioning Systems (GPS)-supported tracking schemes, which determine the location of a vehicle. And Johnson Vaughn said JN General Insurance offers discounts for vehicles fitted with such tracking devices.
"One very simple security device, which is effective, is a steering lock," she pointed out, "and thieves tend to choose the easiest route; hence, a vehicle with a visible steering lock will be less appealing to burglarise than one without."
She stated that JNGI also promotes defensive driving, as the insurer recognises that most road accidents are caused by human behaviour. As a result, discounts on premiums are offered to less experienced drivers who complete the Jamaica Automobile Association (JAA) Driver Improvement Programme.
Open to any licensed operator of a motor vehicle, the JAA course takes the driver beyond the basic mastery of the road code and the mechanics of driving.
"Ultimately, you are your vehicle's most important safety device," Johnson Vaughn advised conference participants.