Car cover not optional
SA’s has highest accident risk, yet our roads have 7 in 10 cars uninsured
THIS article was prompted by a recent press release by the South African Automobile Association (AA) on the alarming fact that some 70% of South African motorists are uninsured.
With about 11,4 million licensed vehicles in the country, many in poor and unroadworthy condition, the accident risk is one of the highest in the world and yet drivers continue to ignore the need to be properly insured. Most people resent paying car insurance, which they perceive as offering no immediate direct benefit. In recent months three experts have been interviewed on the Inqola Motor Show on Capital Radio 104fm each Saturday morning from 9 am to 10 am.
These are: Keith Sampson, an experienced claims adjuster, Geoff Clarke, owner of a brokerage handling a considerable amount of car insurance, and Moosa Allee, owner of one of the largest brokerages in the city.
The views expressed in this article are a consensus of the views of these three experts.
Congestion and collision
With growing congestion on our roads and parking lots, as well as our deteriorating road infrastructure it’s not any longer if you have an accident, but when.
Many drivers consider themselves careful and accident immune and, presuming our roads were driven only by careful, courteous motorists, this might be the case. However, South African motorists are well known for their complete disregard of the rules of the road, turning our roads into nightmares of death and destruction and killing both the innocent and the guilty.
The amazing fact is that, after India and China, South Africa has the third-highest road accident rate in the world.
Car insurance is the most important insurance you will ever buy and you should not be allowed on the road without it.
Comprehensive cover for your car is expensive, as it covers both your car and others involved in an accident.
There are however other ways of insuring yourself. Perhaps the best known is the balance of third party insurance, where you cover the interests of others but not your own. It can be linked to the insurance of your home and will cost you as little as R60 a month, or on its own about R80 a month.
There was general agreement among our experts that, as in many other countries, no car should be licensed without at least being covered by this type of insurance and fines should be made applicable to those driving without this cover.
Buying car insurance
These days the media overflows with advertising for cheap insurance or insurance which provides cash back after five years without a claim.
You can buy online and receive volumes of legally binding insurance conditions, which almost 90% of policyholders never read. With the result that you actually know little about what is covered and under what conditions your claim will be paid.
The message from our experts is clear, do not focus on premiums — focus on quality.
Not all insurances are the same and you will only know whether your insurance fits your needs when you lodge a claim.
Also, buy car insurance through a properly-accredited broker, it costs no more and the broker will not only be able to advise you on how best and most inexpensively to cover your needs, but will also handle you claim when it is lodged.
Excesses and bonuses
An excess is a first amount you agree to pay your insurer in the event of a claim, these days it amounts to between R3 500 and R5 000. It reassures your insurer that you will only claim for major collisions and so has an effect on your premium. A no-claim bonus on the other hand is a discount on your premium allowed you by your insurer for not claiming, and this bonus could, over time, decrease your premium by up to 50%.
The good news is that you can insure both your excess and noclaim bonus for only a few rands a month.
Immediately after an accident you need to collect as much information as possible on others involved.
Names, addresses, ID numbers, driving licence details and passenger details. Interview witnesses and get their details at the scene.
Take photographs with your mobile. It is wise to carry a small plastic wallet in your car with pen, paper and chalk to mark the crash scene. Don’t be rushed by other drivers who want to pass the accident.
You then need to go to the nearest police station to report the accident and obtain a case number, which is crucial to your claim. If police are already on site so much the better. If there are injuries you will need to know what these are and where the injured have been hospitalised.
Write-offs and vehicle values
After an accident your insurers will value your vehicle and if repair costs are higher than a certain percentage of its value, they will write it off and pay out a percentage of that value, as happened after the great hailstorm in Pietermaritzburg in March 2015.
If the damage is cosmetic you might like to buy the car back from your insurer, if that is allowed in terms of your policy.
It is possible to insure for replacement value but costs are very high.
Argument for car insurance
Some say the cost of car insurance is high. We believe that the costs of non-insurance are much higher. An accident that is wholly or partly your fault could wipe out you and your family financially. We know times are hard, but motorists need to cover themselves adequately.