FIRST-TIME OWN­ERS

The Star Early Edition - - METRO -

GET­TING your first car? In­sur­ance should be your first con­sid­er­a­tion. As the year draws to a close, one thing that many South Africans are hope­ful for is a bonus or 13th cheque to sup­ple­ment their spend­ing over the De­cem­ber hol­i­days. With the added boost of in­come, this is also the pe­riod dur­ing which first-time ve­hi­cle buy­ers are more likely to con­sider pur­chas­ing a car.

For those with lim­ited bud­gets, out­go­ing car mod­els are gen­er­ally con­sid­ered a more af­ford­able op­tion. This is also the time when par­ents are hand­ing down their cars to chil­dren who are start­ing univer­sity or col­lege in Jan­uary.

Apart from the free­dom ex­pe­ri­enced with own­ing a car for the first time, there are cer­tain re­spon­si­bil­i­ties that come with it, such as in­sur­ance. While in South Africa it is not com­pul­sory to have car in­sur­ance, there are many good rea­sons why you should take out this kind of cover.

“South Africans have a re­spon­si­bil­ity to them­selves and other road users to have car in­sur­ance,” says Vera Nagte­gaal, the ex­ec­u­tive head of Hippo.co.za. “The fi­nan­cial im­pli­ca­tions of an ac­ci­dent for you and for oth­ers in­volved can be enor­mous. In­sur­ance could pro­tect you from the fi­nan­cial loss and al­low you to ful­fil your obli­ga­tions to the other party, should you be re­spon­si­ble for caus­ing the ac­ci­dent.”

Nagte­gaal adds that in the in­stance of par­ents gift­ing their chil­dren cars, many still keep these in­sured in the par­ents’ names.

“If this is the case, it is im­por­tant that you in­form your in­surer who the pri­mary driver of the ve­hi­cle will be,” says Nagte­gaal. “This may come with an in­crease in pre­mi­ums – younger driv­ers are more ex­pen­sive to in­sure – but if you don’t do this the in­sur­ance com­pany may have grounds to re­ject a claim.” FOR THOSE TAK­ING OUT CAR IN­SUR­ANCE FOR THE FIRST TIME, THERE ARE A FEW DIF­FER­ENT TYPES AVAIL­ABLE ◆ Com­pre­hen­sive ve­hi­cle cover

This cov­ers many dif­fer­ent types of dam­age to your ve­hi­cle, in­clud­ing theft, hi­jack­ing, fire and ac­ci­den­tal dam­age, as well as cover for the ve­hi­cle of a third party. Some com­pre­hen­sive car in­sur­ances also of­fer tow­ing, road­side as­sis­tance or car hire, which are ad­di­tional ex­penses you may in­cur when you are in an ac­ci­dent.

Since it cov­ers so many dif­fer­ent even­tu­al­i­ties, com­pre­hen­sive ve­hi­cle cover is the most ex­pen­sive form of car in­sur­ance of the three op­tions pro­vided in this ar­ti­cle.

◆ Third party, fire and theft cover

This ex­cludes cover for ac­ci­den­tal dam­age to your own ve­hi­cle but does cover theft, hi­jack­ing and fire dam­age, as well as any costs you may be held li­able for in the case of ac­ci­den­tal dam­age to a third party.

This type of cover is cheaper than com­pre­hen­sive cover be­cause ac­ci­den­tal dam­age to your ve­hi­cle is not in­cluded. ◆ Third party only

This does not cover any loss or dam­ages to your ve­hi­cle, but is an im­por­tant type of in­sur­ance in case you cause dam­ages to an­other per­son’s ve­hi­cle. With­out this type of in­sur­ance, you could be legally charged for the cost of re­pairs or re­place­ment of the other car.

This type of in­sur­ance is the cheapest op­tion.

◆ Ad­di­tional auto in­sur­ance types

A num­ber of in­sur­ance providers now sell sep­a­rate add-on in­sur­ance prod­ucts that cover:

Dents and scratches

Tyre and rim dam­age Wind­screen dam­age

Nagte­gaal says when de­cid­ing which type of in­sur­ance to choose, it shouldn’t only be based on what you can af­ford.

“When you are com­par­ing the costs of your premium from dif­fer­ent in­sur­ers, you should con­sider what you are get­ting, not just what you are pay­ing. Con­sider the ser­vices you are of­fered and un­der­stand that lower pre­mi­ums of­ten come with greater fi­nan­cial risks and higher ex­cess pay­ments – which means that when you sub­mit a claim, you may have to cover a cer­tain amount out of your own pocket,” she says.

Nagte­gaal adds that while in­sur­ance is gen­er­ally seen as a grudge pur­chase, all mo­torists are re­lieved to have it when an ac­ci­dent oc­curs.

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