New car owner? Learn about the best types of car insurance
Car insurance is one of those covers that you do not compromise on.
Accidents happen when you least expect it, and in order to be protected in the event that something does happen, you need car insurance.
Without car insurance, you can expect nasty repairs that could cost you an arm and a leg.
Here are the different car insurance options to choose from in South Africa:
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Comprehensive cover
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Pay-as-you-drive (comprehensive cover, but limited)
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Third party, fire and theft cover
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Third party cover
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Comprehensive cover
A comprehensive insurance policy is important for accidents as it covers both you and your vehicle, as well as any damage that is done to the other parties involved (vehicle, property or injury). Because of the context of the coverage, comprehensive cover is the most expensive form of car insurance. If you have a vehicle that is financed through a dealer or bank, this type of insurance is compulsory.
Any other damages such as weather conditions, theft, animal collision or fire are separately specified, so make sure you’ve considered all the alternative specifications before you purchase this type of cover.
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Pay-as-you-drive cover
This type of insurance is particularly designed for people who don’t make use of their vehicle often, but when they do, they still want to be covered in the event that an accident was to happen. For pay-as-you-drive insurance, you will reap many of the benefits that comprehensive cover offers, but it will be limited and charged according to the amount of time that you spend on the road.
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Third party, fire and theft cover
Unlike the comprehensive cover, your vehicle property will not be covered for any accidents. This type of insurance covers you for damage to the other party’s vehicle in the event of an accident, but yours will only be covered if your vehicle is damaged due to a fire, weather damages or theft. Although helpful if something were to happen to somebody else’s vehicle because of you, you will still need to fork out payments on your own vehicle. This insurance is one of the cheapest options, so sure you consider all your benefits before making an impulse purchase because of the price.
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Third party only insurance
Third party insurance is another cheaper option, mainly due to its limitations. This type of insurance only covers you for damage to another party’s vehicle in the event of an accident. Put simply, you will be able to cover the costs associated with the accidental death or injury of third parties involved, but anything to do with you and your property will not be covered in any way. You’ll need to pay for it yourself.
Other frequently asked questions:
What is not covered by car insurance? Reading the printed detail on your insurance plan will tell you everything that is included in your cover. The usual things that are not covered are wear-and-tear on your vehicle, and if you leave South Africa with your vehicle (unless this is included in your cover).
What value to use when you insure your car? Insuring your car is a lengthy process. You are required to submit your details to the insurance company with the model number, the year it was manufactured and any other details you would want your insurance company to know about beforehand. It’s important to be upfront with this information, as these details will determine the amount of insurance you will be paying every month. They will come up with an amount, calculated through a computer system which will then be communicated to you for confirmation before submitting. You will have the opportunity to either insure your car for its retail or market value, of which, the retail value is the better option. If you cannot afford its retail value, consider getting your car insured for its trade-in value.
What else influences your premium? You’ll be surprised at the process that goes along with rating your vehicle’s value. Other things to consider are the vehicle colour, as brighter colours are usually cheaper. The person who will be driving the vehicle and their age are two important aspects that contribute to your payments. Younger drivers can expect to pay more if they are under the age of 25-years-old. If you have been involved in various accidents before, your amount will be analysed because you are seen as a high-risk driver. And, lastly, the insurance company will need to investigate how often you use your car and for what, as well as where it gets parked every night. These all determine your car’s value.
In conclusion
Before you make any hasty decisions, consult with a broker about the most feasible option for your lifestyle. Much like medical aid, car insurance cannot be ignored, and because of lower budgets, do not limit your payments because of the price.The more expensive your car is, the higher your premium will be. And, along with your personal contributions listed above, it may affect the price even further.
When searching for used cars for sale in Limpopo or elsewhere in South Africa, take all these factors into consideration. Prices can change drastically per region, so as much as that may provide you with a bit more financial leeway, remember that with newer models the premium will increase. Make sure you are able to afford a higher premium before you make an impulse purchase. Also, it’s important to note that if your brand-new vehicle is going to be driven by your partner or a parent at times, make sure that you are both covered as you will not be able to claim if the person driving is not the person listed on the policy.