King Price Pay Per K Car Insurance

Why You Should Get ‘Pay Per K’ Car Insurance

As the COVID-19 pandemic and ensuing national lockdown has continued, many people are taking increasingly worse financial hits. If you’re lucky, your salary was only reduced by a few percent, but there are lots of South Africans who’ve been placed on unpaid leave or lost their jobs entirely. It’s a trying time and households are making hard choices about where to save.

In answer to this, brands are doing their best to make things affordable (and stay in business). Most retailers have practically painted their stores red with sale signs and many of the banks have come up with some form of payment holiday or COVID relief plan. Even insurance companies have come to the table to help people stay covered and pay less.

1 of the popular products on the market at the moment is a ‘pay per k’ type of car insurance product, but before you switch from comprehensive to this seemingly cheaper policy, we thought we’d unpack the finer details.


What Does ‘Pay Per K’ Mean?

While this will differ depending on which company is underwriting the product, generally this approach means that the premium you pay is contingent in some part on your mileage. Seemingly, if you’re driving less, then you’ll pay less.

It makes sense. A lot of the risk that insurance companies are insuring is related to your car being on the road, exposed to greater chances of hi-jackings, theft, and accidents. If you’re driving less, then your risk is mitigated and it’s this little loophole that some insurers are stumbling upon and using to their clients’ advantage.

The question is, what are you sacrificing in order to enjoy this lower premium? Again, different insurers will have different takes on this. We took a look at this policy here and found that the level of cover didn’t change. You could still enjoy comprehensive cover for things like accident damage, theft and hi-jacking, towing and storage, third party liability, hail damage, and so on, while paying a cheaper premium because you’re driving 100km or less per month.


How Are They Working Out The Premiums?

This is an interesting question to unpack and obviously what we’ve found won’t be the industry standard. The simplest premium model to understand based your first month’s premium on the average mileage that you provide your insurer with. After the first month is over, the insurance company takes your actual mileage via tracking device updates and uses it to adjust your premium. Every month, your premium will be adjusted to reflect how much you drove in the previous month.

The intention is for your premium to always stay low, based on the fact that you don’t drive all that much. This means that the ‘pay per k’ car insurance policy is best suited to those who don’t use the insured car all the time or to travel very far. Perhaps it’s the kind of cover that you’d take out for your somewhat older parents or for your second car. Ultimately, though, it seems like a decent product to help you save money each month and is definitely worth looking into. We recommend exploring the ‘pay per k’ car insurance offering from an insurance company who spells the mechanics out clearly. If you’re interested, then check out this product as a starting point.

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