Ironing out the finer details on your vehicle Insurance

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Most people do not find it riveting stuff having to trawl through the jargon and definitions of what exactly you are covered for and, more importantly, what you are not covered for.

According to Mandy Barrett, of insurance brokerage and risk advisors Aon South Africa, with so many different options on the market, there are important aspects that one needs to consider that will affect the type of cover one should take out.

“In fact, you may even want to do the insurance research before you buy a vehicle, as this may affect your choice of vehicle in the end, when you look at things like affordability, required security measures and crime stats,” said Barrett.

“This is why, when it comes to shopping for insurance, there’s really no beating the help and guidance of a professional insurance broker to protect your best interests, point out all the important aspects of your cover and what the general market trends are, making sure you don’t get any unwelcome surprises come claims time.

“There are so many aspects that affect your motor insurance, ranging from the make and model of the vehicle, through to the cost of parts and availability, whether you need car hire in the event of an accident, what the vehicle is utilised for, your driver profile and age and even your credit rating.

Aon points out a few interesting South African vehicle insurance facts:

· 70 per cent of all motor insurance claims are accident-related.

· 55 per cent of all accident claims have no third party involved, comprising incidents such as a gate closing on a car or a driver reversing into their spouse’s car in the driveway, or the unseen ditch in the parking lot.

· The average claim value on a motor insurance policy ranges from R15 000 to R17 000.

· Conservative industry estimates are that only 40 per cent of vehicles on the road are insured, creating a real dilemma if you are involved in an accident where the other party has no insurance – another very good reason to have a professional broker on your side to protect your interests.

Barrett said from an insurance perspective, it is crucial to take the following matters into consideration when you are in the process of purchasing a vehicle:

· Do your homework on the make and model of your vehicle and find out if the parts are readily available.

· Be aware of vehicles that are considered to be higher risk for theft and hijackings.

· Obtain different insurance quotes on different vehicle makes that you are considering, to give you an idea of the risk involved.

· Be aware of the type of security precautions you will need, such as a tracking device, as you need to factor the ongoing subscription cost into your monthly expenses.

· Remember to check whether there is anything that you need to add into your standard motor vehicle insurance agreement, such as scratch and dent cover, tyre cover, hail damage cover and so on – don’t assume that you are covered for everything.

· Consider the length of your car hire cover, in the event of a vehicle repair taking longer than the standard one month car rental allowance – ask your broker what your options would be.

· Specify any add-ons to your vehicle that are not standard features, such as alloy mag wheels or a specific sound system, nudge bars and side steps, a GPS navigator and additional lights. These all add additional value to the vehicle and need to be accounted for in your sum insured.

· Credit shortfall cover – ensure you are covered for the finance charges in terms of your finance agreement. This is the difference between the value of your vehicle and the outstanding finance settlement at your bank.

What to do if you are in an accident:

“Never accept liability in an accident – it is the job of the insurance assessors to work out who is responsible,” said Barrett.

“Your insurer and broker will handle all third party dealings in order to recover your excess and reinstate your no-claim bonus if the accident was not your fault, and you don’t want to compromise this process by accepting liability that is not yours.

“At the scene of the accident, make a note of the other vehicle’s registration and licence disc number, as well as details of the make, model and colour of the car.

“Ask for the driver’s licence and/or ID book and take down the details.

“Also, get the other driver’s insurance details.

” If there are any witnesses, obtain their names and contact information.

“Take photos, where possible, of the damage and scene, as well as important documents such as the licence disk, driver’s licence and so on – cellphones with built in cameras are very handy in such a situation, but also make hand written notes, just in case.

“Write out a detailed recount of how the accident happened before you forget any details – include things like lighting, weather, road conditions and so on.

“Make sure you report the incident to the police within 24 hours and get a case number – this is essential for both parties to do.

What if the other party is not insured?

Barrett said that, in the event of a third party not being insured, your insurer will honour your claim.

“If you have insurance, but get into an accident with someone who doesn’t, different scenarios apply, depending on your insurer,” she explained.

“You are most likely going to have to pay the excess for any repairs to your vehicle, and your premium could also increase as a result of the claim due to the loss of your no claims bonus. Make sure you discuss these finer details with your broker so you know exactly what would happen in such a situation.”