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10 Car Insurance Tips you must know before getting covered!



Know these key car insurance facts, features and tips before taking out cover with an insurer. What drives car premiums in SA, excess types, total loss then salvage definitions, tips on evaluating a quoted premium and more.

Insurers group car usage into different classes of use. Make sure you take out cover by disclosing the correct usage.

   Class of use for your car:
            - Social to and from work
            - limited business
            - business use

It is a requirement on your part to keep your car in a roadworthy condition as this is stipulated by insurers in contract clauses.

 - You shall maintain The Vehicle in an efficient and roadworthy condition in compliance with the Road Traffic Act and the Regulations promulgated there under.

 - Please check the condition of The Vehicle regularly, especially tyre tread depth. The minimum legal requirement is 1mm (one millimetre) throughout the breadth and circumference of the tread surface area (Regulation 212).

Always read anniversary letters as they show your new insurance premium but also by how much your sum insured has increased. Adjust accordingly.

The policy value of your motor vehicle is adjusted annually in accordance with the current market and retail values, as selected by you. In the instance of your vehicle being insured for an agreed value, the sum insured for that vehicle will remain unchanged. Note that it is your responsibility to provide insurers with the latest value of your vehicle.

What drives car premiums in South Africa

   - Most of the factors driving premiums up have little to do with a vehicle's value since over 90% of motor vehicle claims are for accident, not total loss. So, regardless of whether the overall value of the vehicle is decreasing, the costs of repairing vehicle damage are constantly on the increase. When it comes to paying for repairs a vehicle's value is irrelevant since the value of a vehicle is only a factor when total loss occurs. Source: Insurer policy wording.

Know your emergency roadside assistance features, and store emergency numbers so that it is easily accessible. Here are some of the roadside assistance features you should look out for on your policy:

Emergency roadside assistance

    - 24 hour emergency roadside assistance within SA borders
    - flat type assistance
    - Battery jump-start
    - Towing service
    - Accident
    - Car lockout service
    - Emergency fuel delivery

Please take note Only use approved towers, otherwise you will be liable for hefty costs for your own account to release your vehicle. Using the towing services of your insurer will mean full cover for towing costs - if you don't, then your cover is seriously limited.

You will get a towing sticker from your insurer showing their approved towing service and emergency number - stick it on one of your car windows as a reminder.

Car Hire is an optional extra that will be listed on your policy schedule if you accept it, at the additional premium. Read more about car hire here

Make a special note about excess types on your policy. Your policy schedule will have a detailed section about your relevant excesses.

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Read these carefully.

Excess types

   - basic excess e.g. R500 per claim
   - additional excess e.g. if driver under the age of 25, additional excess of R1,500
   - excesses can be flat as above, or a percentage of claim value: 7.5% of the claim
   - excesses can differ by claim event circumstances 
   - also differ by asset type: car, motorcycle, trailers, caravans, watercraft

The Principal driver is the regular driver. The correct details must be listed with the insurer at all times. Ensure any changes to your drivers license is then communicated to your insurer as well.

Please take note Additional excesses apply for regular drivers under the age of 25; drivers other than regular driver; driver with license duration less than 2 years or in possession of a learners license.

The name of the driver nominated as Principal Driver is shown in the Schedule of Insurance. Premiums are based on the risk of the regular driver. Thus if the insurer has the incorrect information they have the right to reject liability for loss at claim time.

The Claims history of the insured and regular drivers must be disclosed accurately. It is also reflected on the policy schedule. Check that it is correct.

Understand the meaning of Total Loss, and note that you do have a say in the decision to write-off a vehicle.

  Insurer Definition of total loss (including stolen and hijacked vehicles) is

   - We will pay the Maximum Indemnity as defined less the Excess payable in terms of this policy. We will replace The Vehicle or pay the current purchase price of a new vehicle, where within 12 (twelve) months of its first registration, The Vehicle is: 1.2.1 stolen and not recovered; or 1.2.2 damaged and the assessed cost of repairs exceeds 70% (seventy percent) of the current new retail price including VAT. 

Please take note Read your policy schedule which outlines the exact definition of Total Loss by your insurer

Total Loss
A total loss is where the cost of repairs, plus salvage, amounts to more than the replacement value of the item at the time of the loss.
Salvage
In the event of a payment by the Insurer for a total loss, the salvage and/or any proceeds subsequently recovered from the sale of the Insured Property or its salvage shall be solely the Insurers property.

Keep the following tip in mind when evaluating a quoted insurance premium.

 - Appropriate Premiums have been scientifically calculated to match the relevant risk. Trying to save money by paying inappropriate Premiums is not worth it in the long run as claims can and will be rejected. Rather pay the correct Premium and enjoy peace of mind.

Please take note Make a note of your debit order date and ensure adequate funds available. You could set your premium deduction date soon after your salary date to avoid insufficient funds.

Bonus Tip

Familiarize yourself with the specific exclusions listed on your policy, under which your claim will be rejected:

    - if the driver is under the influence of liquor or drugs or prescribed medication (with narcotic effect) which affected the drivers driving ability or while the concentration of alcohol exceeds the statutory limit (irrespective of the manner in which the alcohol concentration was measured).

    - where the driver of The Vehicle refuses to use a breathalyzer or give blood sample.
    - where the driver of The Vehicle leaves the accident scene without following the claims procedures.
    - loaded with more goods or passengers than that for which The Vehicle is designed or licensed to carry.

Please take note Read your policy document for a full list of exclusions.



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