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If you’ve found yourself wondering about why certain insurance companies are able to offer cover at more competitive rates than others, you may want to look more closely at the cover provided.

“An insurance product offered at significantly lower premiums will almost always involve recouping associated losses though other means,” says Lizette Erasmus, insurance products manager at the IntegriSure Insurance Group of companies, an authorised financial services provider offering specialised short-term insurance and other products for niche markets. “The excess payable at point of claim is often exactly how this is done.”

It is important to make sure that you are not, in fact, going to be paying out a lot more than your annual premium in the event of having to make a claim. Reduced premiums often go hand in hand with higher excess charges, so basing one’s insurance purchase decision solely on monthly premium is not advisable.

It is far more prudent to consider the following when purchasing short-term insurance:

• The product’s flexibility – does it make allowance for your particular lifestyle, as well as any possible associated changes?
• Are all policy fees clearly defined?
• Is the relationship you have with your financial services provider open and honest and have policy particulars been clearly explained?
• Are the policy exclusions standard to the short-term insurance industry?

Client service levels also play an important role in determining where one will purchase insurance. An intermediary that offers a 24-hour assistance line, an after-hours claims facility, a national service network and so forth is often an established industry player where client service delivery is viewed as an essential part of the overall product offering.

“These services may come at a slightly higher premium, but this pays for itself in terms of the end result. Going cheaper is not necessarily the answer. One needs to shop around for the best combination of product, price, service and those additional, value-added services being offered,” concludes Erasmus.