Okay, so you’ve just bought your first car, and now you need to insure it. Welcome to adulting. But understanding insurance quotes and cover needs can be a bit confusing for first-time insurance buyers.
To make things easier, we asked King Price Insurance’s partner of client experience, Wynand van Vuuren, for some Insurance 101 tips.
Why must I insure my car?
Good question. South Africa is one of the few countries in the world where insurance isn’t compulsory. In countries like the UK, you have to get temporary insurance even if you just drive a friend’s car from one town to another. But here are our 5 top reasons to insure:
- It protects you from financial disaster. If you’ve financed your car, and it’s stolen or written off, you will still need to pay the bank what you owe them. If you’re insured, the insurance company does that for you. That’s why banks make comprehensive insurance a condition for getting the loan in the first place.
- Accidents. According to the AA, there are around 12 million registered vehicles on SA’s roads -“ but only three out of every 10 are insured. So, if you’re involved in an accident, you’ve got a 70% chance of the other party not being able to cover any of the damage. Which means you cover all your own costs.
- Theft. 83,000 vehicles were stolen in SA in 2018/2019. "If your car was stolen today, would you be able to replace it? Didn’t think so. Be smart," says Van Vuuren.
- Life’s little -˜oopsies’. Scratches, scrapes and cracked windscreens are an unfortunate reality of car ownership. Insurance soothes the pain.
- Liability (third party) cover. While the Road Accident Fund takes care of costs relating to injury and loss of life of third parties if you have an accident, it doesn’t cover costs for damage to their property. And this can run into millions.
What are the different types of insurance?
Okay, okay. We get it. We need car insurance. So how do you make it as quick and painless (and cost-effective) as possible? For a start, choose the cover you need, says Van Vuuren.
- Comprehensive car insurance. As the name suggests, this covers you for all accident damage, fire, storms, theft and hijacking, and any damage that you may accidentally cause to other cars or property. This is a no-brainer if your car is financed.
- Third-party, fire and theft car insurance. This covers you for loss and damage to your car due to fire, theft and hijacking. It also covers you for liability to other people’s property as the result of an accident.
- Theft and write-off insurance. This is a fairly new offering: it covers you for the total loss of your car if it’s written-off, stolen or hijacked. It also covers any damage incurred during an attempted theft or hijacking.
- Third-party car insurance. This covers you for liability for accidental damage to other people’s property. Every car owner should at least have third party insurance to cover their liability.
- Shortfall cover. This is important: it covers the difference between what your car is worth and what you still owe the bank, in the event of a total loss. Remember, because of interest and additional costs, you may owe the bank more than what the car is worth. Don’t get caught short.
What else do I need to know?
- Car insurance doesn’t pay for services and maintenance. That’s either covered by your maintenance plan or your own pocket.
- Remember to insure your extras. If you have a fancy sound system or custom rims, be sure to specify them, or they won’t be covered in the event of loss or damage.
- Think about the add-ons. Your insurer will offer you extras like car hire so that you won’t have to walk while they’re fixing your insured car; roadside assistance; or a panic service like code red. For a few extra Rands a month, they may be worth your peace of mind.
In the end, you want to choose the insurance that makes the most sense for you. Do your homework. Work out what your needs are and what you can afford. Remember that King Price is the only insurer that offers comprehensive car premiums that decrease monthly as your car loses value. And be safe out there!
Picture: Unsplash
