Your car is likely to be one of your biggest assets you will own. It’s a significant financial investment, not to mention an essential when it comes to getting from A to B for work, leisure, study and the usual family responsibilities. With more people returning to work, increasing crime, deteriorating roads infrastructure, heavy thunderstorms and the like, Aon South Africa, insurance brokers and risk advisors, provide a handy checklist to consider when insuring your vehicle:
- Don’t assume that your policy covers everything – check your motor insurance policy for any covers which may not form part of your standard wording such as dent cover, tyre cover, hail damage and so on.
- Buying a car? Many factors have an influence on the cost of your insurance ranging from the make and model of the vehicle, through to the cost of parts and availability, whether the vehicle is used for business or personal purposes and the regular driver profile and age, to mention a few.
- Get credit shortfall insurance – When a vehicle is written off in the first two years of signing a finance agreement, the accrued interest on the loan may very well mean that your insured value of your vehicle could be less than your outstanding debt to the bank. If you don’t have credit shortfall cover, you will be liable for the shortfall.
- Always insure for the retail value of the car – Retail value is the price at which the dealer will sell a second-hand vehicle to you. Market value is the average of the difference in price between retail value and its trade-in value, in other words what you could expect to receive from a dealer, were you to trade the vehicle in.
- Beware of low premium-high excess insurance covers – If you claim on your vehicle insurance, you may have to pay what is called an insurance deductible or excess – the first portion of the claim that you are responsible for. This amount can vary. Make sure to discuss your excess options with your broker.
- Protect yourself against vehicle theft with a tracking device – Speedy recovery of a stolen vehicle means less inconvenience, less damage and thus less repairs. Most insurers offer discounts on your monthly premiums if your vehicle is fitted with an approved tracking system.
- Who is driving your vehicle? Make sure that your policy covers any individual that may drive your vehicle with your permission. Some insurance policies offer a lower premium that place specific exclusions in the terms of cover – like a regular driver clause.
- Insuring a student vehicle – Insuring a vehicle for a young or inexperienced driver who recently obtained their drivers licence will typically cost more in premiums due to the higher risk. It’s always a good idea to consider additional personal liability top-up cover if you are insuring your child’s.
- Car hire – If you cannot live without your car, then make sure that you have car hire specified if your vehicle is involved in an accident. Also check what would happen in the event of your car hire rental period running out before your car is repaired.
- Maintain your vehicle in good working order – Insurance is there to cover sudden unforeseen circumstances which result in loss and/or damage and does not cover damage as a result of negligence or wear and tear.
- Leave valuables at home – as far as possible, don’t leave valuables in your vehicle but if you absolutely must, make sure they are out of sight and locked away in the boot. Your car insurance does not cover you for these items unless specified under the All Risks section of your household contents policy. Likewise, never leave house keys, gate and alarm remotes and personal details and documents in your vehicle.
Don’t wait until you have a mishap to find out that there are gaps in your insurance cover that could leave you compromised. Get the advice and guidance of an expert broker who will do a thorough needs analysis at the outset to ensure that cover is tailored to your specific requirements and circumstances, and also point out any potential pitfalls or blindsides.