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More insurance tips: How to keep your car covered

2018-02-17 22:00

COST TO SA: Road related accidents, crashes and deaths costs South Africa billions each year. Image: iStock

Pretoria – Whether you are shopping around for a new car or you already have a car, one of the most important aspects you face as an owner is insurance. If your vehicle gets broken into, hijacked, stolen, or damaged in an accident, the unexpected costs for repairs or replacement can be extremely high. Insurance is there to have your back. 

In some countries, the law does not require drivers to have insurance when buying a car. However, if your car is under finance in South Africa, you must have full comprehensive car insurance. 

"Any vehicle financed through an automaker's finance facility must be insured," explains Gerald Hong, Brand, Marketing and Sales manager for Ford Credit South Africa. "These service providers can facilitate comprehensive insurance that covers your vehicle in full, as well as any damage to the property of a third party."

Whether your car is under finance or paid, insurance is an important consideration. Taking out an insurance policy is a significant additional expense and there are many options to choose. 

“Aside from shopping for the most cost effective insurance, it is important to understand exactly what your insurance covers,” says Hong. “Vehicle insurance is not a one-size-fits-all product and you need to make sure you get the right cover.”

When purchasing a policy for your new car, it is important to understand exactly what the policy covers. Customers who finance their vehicles through some automakers can opt for comprehensive insurance for their vehicles that includes items such as the following:

• Protection against claims arising from damage to the vehicle or the property of any third party
• Third-party claims by passengers
• Cover in the event of hijacking, theft, break-ins, fire, or total write-off.
• Towing and storage costs
• Sound system and radio cover
• Windscreen replacement cover
What's the cost?

Insurance companies determine individual premiums based on a number of factors. The two biggest factors involve you and your vehicle. Essentially, the insurer will consider your risk profile and the value of your vehicle – the higher the cost of repair or replacement, the higher the premium. 

"Sports cars are generally more expensive to insure, and young drivers often pay higher monthly premiums than older, more experienced drivers with an established safety record," explains Hong. 

Insurers will look at the type and price of your vehicle, your personal information, your age, your driving history and your previous insurance record, if there is one. Your monthly premium is based on all this information. 

However, paying your premium each month does not mean that you won’t need to pay anything in the event of a loss. You still need to pay for the excess or insurance deductibles. The excess is a fixed amount you are responsible for before the insurance reimbursement kicks in.

A higher excess means lower premiums, and vice versa. The more you pay up front, the less you will have to pay for any damages later. You can chose to pay the minimum premium possible, but further down the road it could cost you a lot more. 

“Shop around and get to grips with the detail of different insurance policies,” says Hong. “If you regularly park your car on the street or outside office buildings, make sure you are covered for all types of theft. Policies differ and some will cover smash-and-grab while others will not. So decide what your risk areas are and shop for an insurance policy that best suits your needs.”

Your claim could get rejected

When you take out an insurance policy, you need to ensure how your actions as a car owner and driver affect that policy. Even if you pay your premiums each month, it does not mean you are absolved of all responsibility. Your insurance company can reject your claim, and you could get stuck with the whole bill. 

Here's a list of some pitfalls that could get your claim rejected:

1 You did not pay your car Insurance premium: One of the most common reasons for denied claims is that car owners did not keep up with their insurance payments. It may sound obvious, but if your payments are not up to date, your insurer does not need to reimburse you. 

2 The driver or car aren’t in order: Your insurance policy covers you as the driver, so if you lend your car to your friend or family member and they are not a named driver on the policy, your claim could be rejected if there is an accident. The insurance company can also choose not to pay if your car was not road worthy at the time of the accident, and this includes tyres worn below acceptable levels. 

3 Not adhering to traffic rules: Your insurance company could reject your claim if the loss is a result of speeding, reckless driving, or driving whilst under the influence of alcohol or drugs. 

4 Non-disclosure: If you fail to be upfront about any issues regarding necessary information you are asked to provide when taking out your insurance policy, not only might your claim be rejected should something happen, but your entire policy could become invalid. You must be honest with your insurance company.

5 Your car was not kept safe: If you do not have certain security measures in place (such as a tracking device) as requested by your insurance company, or if you have stated that you have but in fact don’t, your claim could be rejected in the event of a theft or hi-jacking of your vehicles.

Tips when insuring your car

Insurance for your vehicle can be purchased directly from the insurance company or through an insurance broker. Ford Credit suggests you keep the following in mind when looking for the right car insurance policy:

• Make sure the insurance company or broker is a registered Financial Services Provider – You can check the Financial Services Board (FSB). 

• Be wary of insurance schemes that offer partial or savings type limited cover – It is recommended that you select Full Retail Value cover if your vehicle is financed.

• Low Premiums – Be wary of premiums that appear to be unrealistically low, as this generally equates to a very high excess. 

• Excess levels – Remember that you have to pay for the excess so make sure you can actually afford the excess before settling on the policy. Also find out if there are any other additional deductibles that you may be responsible for when it is time to claim. 

• Vehicle details – Ensure that the vehicle details on the policy are identical to the vehicle you are insuring. Make sure standard and additional accessories on the vehicle are specified.

• Claims service/Process – When you need to claim make sure it is an easy and straight forward process

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