MOTORING NEWS - Even experts agree that understanding the finer details of car insurance is not exactly riveting stuff but it is vital to know exactly what one is covered for and often more importantly, what is not covered.
With so many different options on the market, there are important aspects that you need to consider that will affect the type of cover you should take out. In fact, you may even want to do the insurance research before you buy a vehicle.
This may affect the choice of vehicle in the end when one looks at affordability, security measures needed and crime stats.
This is why when it comes to shopping for insurance, there's really no beating the help and guidance of a professional insurance broker to protect your best interests, according to Mandy Barrett, of insurance broker and risk advisor Aon Aouth Africa.
"There are many aspects that affect motor insurance, ranging from the make and model of the vehicle to the cost of parts and availability, whether you need car hire in the event of an accident, what the vehicle is utilised for, driver profile, age and even credit rating. With all this to consider, it can be a minefield trying to navigate the terms of a motor insurance agreement without the insights of an experienced eye," she says.
Aon has a few pointers regarding South African vehicle insurance. Some have been highlighted before, but they bear repeating:
- 70% of all motor insurance claims are accident-related.
- 55% of all accident claims have no third party involved, with incidents such as a gate closing on a car or a driver reversing into their spouse's car in the driveway, or an unseen ditch in the parking lot.
- The average claim value on a motor insurance policy ranges from R15 000 to R17 000. Conservative industry estimates are that only 40% of vehicles on the road are insured, creating a real dilemma if you are involved in an accident where the other party has no insurance. This is another very good reason to have a professional broker to protect your interests.
From an insurance perspective, it is crucial to take the following matters into consideration when you are in the process of purchasing a vehicle:
- Do your homework on the make and model of your vehicle and find out if the parts are readily available.
- Be aware of vehicles that are considered to be higher risk for theft and hijackings.
- Obtain different insurance quotes on different vehicle makes that you are considering, to give you an idea of the risk involved.
- Be aware of the type of security precautions needed, such as a tracking device, as this needs to be factored into monthly expenses.
- Remember to check whether there is anything to be added onto standard motor vehicle insurance agreement such as scratch and dent cover, tyre cover and hail damage cover. Don't assume that you are covered for everything.
- Consider the length of car hire cover in the event of a vehicle repair taking longer than the standard one month car rental allowance. Ask your broker what your options would be.
- Specify add-ons to your vehicle that are not standard features on the vehicle such as alloy mag wheels or a specific sound system, nudge bars and side steps, a GPS navigator or additional lights. These all add additional value to the vehicle and need to be accounted for in your sum insured.
- Credit shortfall cover - ensure you are covered for the finance charges in terms of your finance agreement. This is the difference between the value of your vehicle and the outstanding finance settlement at your bank.
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