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 By now millions of vehicle owners across the globe have been alerted to vehicle recalls from several manufacturers, the most prominent of which has been the recalls by Toyota. This has done significant damage to the Toyota brand – a brand that has always been perceived as that of safety conscious manufacturer with close attention to detail and quality.
The media and especially social media have alerted the Toyota owners to the safety concerns – but what is the impact on the finances of the vehicle owners and more specifically – are there specific car insurance concerns that they need to be aware of? We would like to discuss this important aspect in this Blog and provide some advice to the owners of recalled vehicles!
Background to the Toyota recalls
Japanese car manufacturer Toyota recalled vehicles due to complaints over sticking acceleration pedals and floor mat pedal entrapment that created serious safety concerns. A voluntary recall was issued by Toyota for eight of its brand name vehicles, including the 2010 Prius, Camry and Lexus HS 250 vehicles.
The recall involved 2.3 million vehicles to correct a sticking accelerator pedal — this is not the same recall involving 4.2 million Toyota vehicles for out-of-place floor mats.
Toyota is well aware of the impact of these recalls on both the bottom line and the brand value and are now carrying out stringent safety tests and modifications. Toyota will incur the costs for such safety tests and modifications.
What impact has the recall had on car insurance?
One of the components of your car insurance premium is the type of vehicle you are driving. The make and model of that vehicle is an important consideration in calculating the premium payable. Car insurers may increase the car insurance premiums where they feel that there is a sufficiently increased risk to driving specific vehicles.
Toyota however has a good reputation in the insurance industry on safety issues, and that will help keep auto insurance rates at current levels. Insurance rates could even decrease as the resale value of the vehicles drops because of the recall. According to the auto research Web site Edmunds.com, the average value of a recalled Toyota vehicle has fallen between 4% and 8% in the past two weeks alone.
Will the recalled vehicle owners still be insured?
Toyota drivers can’t lose their coverage because of the recall — they’re covered in case of an accident from the date of purchase of the car insurance policy. Some US insurance companies have already confirmed that drivers shouldn’t see their insurance rates increase as a result of the recall, but they will have to immediately perform preventative measures by having the cars checked and fixed.
What if you have already been in an accident caused by the defective acceleration pedal?
If you have been driving the recalled vehicle and caused an accident where any recalled part failed, the insurance company is likely to go after Toyota to cover any damage to the vehicle. If you have not answered the request to have your vehicle returned the insurance company may hold you partially responsible for the accident.
Of concern to the vehicle manufacturer is that car insurance companies might also go back in time and consider previous accident claims wherein these vehicles were involved. They might have to pay more than just for the inspection and modification of recalled vehicles.
It will be interesting to see what the effect of the recall might be in cases where the vehicle was involved in an accident, a claim was submitted and the vehicle owner lost his “no claims bonus” as a result of such claim…
Advice to owners of recalled vehicles
It is most important to obey the call to have the vehicle returned for inspection to Toyota. You need to do so not for the purposes of affordable car insurance premiums, but for the safety of you, your passengers and other road users!
The same would apply to the owners of recalls from other manufacturers. We need to be alert and vigilant to communications from our vehicle manufacturers and ensure that our vehicles are roadworthy and safe modes of transport at all times!
 We have written quite a bit on the topics of finding cheaper car insurance and finding the best car insurance. This however focuses the attention on the need to have effective cover in the unfortunate event of an accident. Car insurance will allow you to survive the financial impact of vehicle loss or damage – but will not save your life!
We need to remember the importance of vehicle safety features and instil in the minds of our vehicle owners the importance of having vehicles well maintained and to abide by the Rules of the road.
The Arrive Alive website received photos of horrific accidents where the condition of the tyres can be regarded as a direct contributing factor to the accidents.
We have included this in a blog post on the Road Safety Blog titled “The truth about worn tyres is bloody scary!!”. From this Blog post we have also added a link to all the Blog posts written on the car insurance blog with reference to tyres.
There are many horrific accident photos available of victims from these accidents. Many will however still ask –How can you blame the tyres as contributing factor?
We have decided to share one photo as it is often said that “a photo says a thousand words”. We would like to urge all vehicle owners to have a good look at the smooth tyre to the front left side of the vehicle. The drivers can no longer do so –he passed away in the accident!
Search this Blog and take the advice to heart on finding the best car insurance. You can save with the correct car insurance product. Use this monthly saving money to replace your old worn out tyres!!
 Damage to the windscreen is most annoying! We all know that feeling when a stone is reflected onto the windscreen and that little crack starts obscuring the view between us and the road! With our roads having deteriorated this becomes even more of a risk – a risk to be addressed by repair or replacement of the windscreen.
Technology and new product development have provided solutions to strengthen the windscreen – but what if it is damaged beyond repair? Will car insurance cover your damaged windscreen?
As a general rule car insurance will normally cover windscreen damage on a comprehensive policy if the damage was sustained during the covered period and all terms and conditions were complied with!
It is important to share with our visitors’ advice on the more important question – Does YOUR car insurance cover windscreen damage to YOUR car?
It remains the most important advice to focus on the terms and conditions of your car insurance policy! There might be reasons why and circumstances under which your car insurance policy will not cover the damage:
- If you failed to pay all the car insurance premiums
- If you failed to take the vehicle for the inspection as prescribed
- If you have not used an approved windscreen replacement agent
The question is however not as simple as merely enquiring about payment or non –payment. You will need to establish whether the full replacement costs will be covered and whether this will have an effect on your excess…Will the replacements have an effect on your no claims bonus?
Car insurance policies in most cases do not pay excess unless the glass is repaired by approved agents. They might also exclude full cover and payment of excess for glass forming part of sunroofs or special glass or windscreens found on expensive imported vehicles.
What can the vehicle owner do to prevent financial harm in the event of windscreen damage?
Best advice is to consult your insurer or broker and request confirmation that your car insurance covers windscreen damage, what the effect might be on your excess and whether this will negatively impact a potential no-claims bonus.
If you are not covered adequately you might consider scratch and dent insurance as an alternative to normal car insurance to help you save thousands in paying unnecessary excesses to your insurance company.
Always communicate with your insurer and rather stay informed to avoid nasty little surprises later on at the time of claims process.
Also view:
 Many car insurance products are marketed as “easy to find” or “quick and simple”. Car insurance is however not simple – but rather complex and needs a bit of time and attention. We have previously written that lazy consumers will not find the correct car insurance products and would like to discuss why we believe that care, time and attention are still required to find the correct car insurance.
Technology and innovation from car insurers have streamlined the process of making products available to the consumers. There are affordable products available for the most basic of needs – products stripped of “extras” to be found with ease via aggregators. This however does not mean that car insurance is “simple”!
I believe it is important to face the facts about car insurance and focus on the challenges facing the consumer.
Many providers / Wide product range
There are today much more variety in providers and products than a decade ago. With the internet and online-businesses of today we have seen an increase in the number of insurance providers, an increase in competition and an increase in car insurance products.
Car insurance Aggregators / Comparison Websites
Insurance aggregators and comparison websites have become business in their own right, feeding off all these other providers and assisting the consumer to select from the maze of offerings available.
The consumer can benefit from the assistance provided by these portals – but has to remain vigilant to which providers are included and excluded from the quotation process, the independence of the aggregator or comparison website etc.
Terms and Terminology
With so many new products and specialization there have been an increase in the terms and terminology to be found in car insurance policies. Financial services legislation drafted with the objective of protecting the consumers has increased the “fine print” required and included in policy documents.
More attention is required by the consumer before signing a car insurance policy document – a document which is no longer a 2 or 3 pager but rather a lengthy document.
Brokers / Direct Insurers
There is more choice available to the consumer as to finding the correct insurer. Some might still use a broker and this broker is less likely to work only as an agent of one specific car insurance company.
The client might decide to purchase car insurance through a direct insurer. There are now a variety of direct insurers operating in the car insurance segment of the financial services industry. Some might even focus on a specific gender group and other will focus on specific categories of vehicles.
It might be important to keep in mind that all the legislation and the increase in offerings and competition are to the benefit of the consumer – but only to the consumer who is willing to put in the work and time to sift through the information overload and find the correct product to meet his needs!
To say that car insurance and finding the best car insurance is simple – is simply not true!!
 It is important to be aware of the terms and conditions of your car insurance policy. It is also important to remember that your car is not insured without full disclosure of who the regular drivers of that car might be. The vehicle owner can also nominate specific drivers of that vehicle.
The Ombudsman for Short-Term Insurance has warned consumers to ensure that they fully understand and appreciate the basis upon which motor vehicle insurance is taken out and the category of persons who are insured whilst driving a motor vehicle belonging to an insured.
Why is “regular driver” and “nominated driver” important for car insurance?
“Motor vehicle policies are commonly underwritten on the basis of a “regular driver” or a “nominated driver”, however in insurance, a regular driver is not the same as a nominated driver”, says Ombudsman for Short-Term Insurance, Brian Martin. These concepts are used in order to assess the risk associated with the insurance of a particular motor vehicle and the premium to be charged. The identity and profile of the driver of a motor vehicle is obviously an important factor in risk, which the insurer is being asked to assume as well as the premium to be charged.
Certain policies of insurance define a “regular driver” as “the person who uses the motor vehicle the most frequently and more than any other”, but this definition is not without its difficulties. The concept is not always capable of precise definition. Where a policy is underwritten on a “regular driver basis”, other persons may drive the motor vehicle in addition to the regular driver, provided that they are in possession of a valid driver’s license and that they are only the secondary driver. It is vitally important that consumers correctly identify the regular driver in instances where more than one person will drive a motor vehicle, to be insured on a regular driver basis and that they provide this information to their insurance company or broker.
A “nominated driver” policy, on the other hand, only gives cover to persons who are actually nominated and recorded as a nominated driver on the policy of insurance. Any person who is not nominated and recorded, as a nominated driver on the policy schedule will not be covered.
What will happen if the vehicle is incorrectly insured and incorrect information disclosed?
The Ombudsman says that consumers should take heed of the fact that if a vehicle is incorrectly insured or incorrect information is furnished to an insurer concerning either a regular driver or a nominated driver, this can result in a policy being declared void from inception, or the insurer having no liability to compensate for any loss or damage. “Utmost care must be exercised in ensuring that the correct information is given to an insurer and that any change in one’s circumstances or day-today living is immediately communicated to one’s insurer or broker so that the necessary endorsements or changes to the policy can be made. Changes could include any change of address or change in the use of a motor vehicle”, says Brian Martin.
If consumers are in any doubt as to whether their motor vehicle is correctly insured or not, they should seek professional advice from a licensed broker, insurance advisor or attorney prior to taking out the policy. This will avoid many problems that could arise at a later stage.
Also view:
 We have given much attention on the car insurance blog to finding cheaper car insurance and identifying the best car insurance company. We have focused on the need to be careful when reading the policy document and to note the fine print.
We would however also like to focus on a small but important part of the process of gaining car insurance – the disclosures made by the insured client on the policy application!
Neglecting to make a full disclosure in your policy documents may lead to an invalid claim – and will allow the insurer to decline your claim. This is very important to understand – so let us explain this in more detail:
- A car insurer calculates the premium based on all the information that the client has provided.
- This information will reveal the risks or likelihood of vehicle damage or vehicle loss.
- Much of this information is only known by the client – such as previous accidents and claims or convictions for drunk driving etc
- Only the client is aware who the nominated drivers or regular drivers will be, whether the vehicle is to be used for private or business purposes etc.
- By not providing ALL this information – and the CORRECT information – you will be guilty of defrauding the insurer and placing the insurer in an unfair, perilous position!
It is important to understand that this is not a “back door” for the insurer to dismiss an insurance claim – but rather as recognition of a fundamental principle of insurance! It is only fair that the rights of the insurer and the legitimate expectation of full disclosure are respected as well.
What is the measurement of how much is to be disclosed?
Insurers are entitled to full and frank disclosure of all facts material to its assessment of the risk and the premium charged. The Ombudsman for Short-Term Insurance, Brian Martin says if you are unsure of your facts, rather ask for more time from your insurer to verify the facts or advise them that you are unsure.
Car insurance clients will ask themselves “Do I need to inform the insurer about this?” We would like to advise that the client rather attempts to place himself in the position of a fictitious judge and ask – Would an independent judge regard that the insurer should have known about this when calculating the premium?”
When does the client have to make this full disclosure?
It is important to recognize that this is not a once-off disclosure or the purchase of a once –off asset! The agreement is based on continuous cover for an asset that needs to be protected from ever changing threats. If those threats are significantly altered – the car insurer needs to be made aware of this!
Consumers need to ensure that they advise their insurer or broker if circumstances have changed since the inception of the policy, for example, there is a new regular or nominated driver, the purpose of use has changed or you have had a change of address.
Decisions by the Ombudsman for Short Term Insurance
It is perhaps best to also to focus on the decisions of the Ombud pertaining to disclosures! How will the Ombud adjudicate disputes about the correctness of information disclosed?
An insurer relies upon the information furnished and bases its assessment on the truth and accuracy of that information. “If you have had prior claims or a judgement against you, make sure that you disclose this information. Rather adopt the policy of providing too much information then too little information”, says the Ombudsman for Short Term Insurance.
Example of partial disclosure made to a car insurer
The Office of the Ombudsman for Short Term Insurer dealt with a complaint where the insured had telephoned an insurance company enquiring about insurance cover for his vehicle and contents of his house. Based upon the responses given to a number of questions, the insurer provided a quotation which was accepted by the insured.
A few months later the insured filed a claim for damage to his motor vehicle which had been involved in an accident in a parking garage. The insurer rejected liability for the insured’s claim on the grounds of non-disclosure. The insured had submitted four accident claims against his previous insurer within a short period of time and which were of significant value. At the time that the insured took out the cover, he was asked whether in the previous five years there had been claims made against his vehicle, to which he only acknowledged one claim. Had the insured provided proper disclosure to his insurer, they would have declined the risk due to his history of claims.
The Ombud commented as follows:
“In this instance, we agreed with the insurer’s decision that they would declare the policy void from inception, but that they needed to refund all the insurance premiums that had been paid by the insured.
The insured knew that he had filed a significant number of claims within a short period of time against his previous insurer and that this information would certainly have affected the insurers assessment of the risk.”
 We have previously added a blog post to the car insurance blog titled “Which occupation has the worst drivers?” In this study the UK Insurer, Churchill Car Insurance disclosed that computer engineers / geeks have the worst road accident records while farmers are the safest drivers!
According to the UK study computer engineers topped the list of those professions making the most accident claims in the last three years. The second most-claiming professionals were sales managers, followed by chefs, students and doctors.
The UK list compiled by Churchill Car Insurance of most frequently claiming occupations are:
- Computer engineer
- Sales manager
- Chef
- Student
- Doctor
- Estate agent
- Surveyor
- Customer adviser
- Hairdresser
- Social worker
Which occupation has the worst drivers in the US?
Insurance.com has made the fascinating finding that attorneys and judges may not quite be so adherent to the rules of the road, topping a list of the top 10 most dangerous drivers by profession.
The insurer found 44% of attorneys claimed a prior accident when looking for a car insurance comparison quote from insurance.com. The findings were based on accident claims as a percentage of quotes in which drivers need to give details of their driving record.
Second in the list came financial professionals followed by government workers while the study found the least dangerous drivers were athletes, with only 17% reporting prior accidents, and homemakers at 24 percent.
“Professions that demand multi-tasking – being on the phone, moving fast on a tight schedule – are prone to more distractions and, from there, more accidents,” said Sam Belden, insurance.com VP, in a statement.
“Though the job of a homemaker demands multi-tasking, young children are often along for any car ride and when children are involved, people tend to take their time and use greater caution.”
He added that homemakers and athletes also tended to be off the road during rush hour.
The US list compiled by Insurance.com of most frequently claiming occupations according to driver record and info disclosed are:
- Attorney/Judge
- Financial professionals
- Government worker
- Bartender or waiter
- Business professionals
- Dog groomer
- Marketing/advertising professionals
- Barber/stylist
- Coach
- Nurse
May we never “judge” too soon the driving ability of a person by his occupation!!
 Do you believe in star signs and how people born under specific star signs reflect specific personality traits? I am not a great believer in star signs but will admit to displaying a few characteristics of the Capricorn sign – the sign for my birthday on the 11th of January!
But can we take this further and investigate whether the star signs can guide us to predict driving behaviour – or even tell us which star signs have the best and worst drivers?
Research from Insurance companies
I have found fascinating results from a survey by Suncorp Metway, Ltd., a multi-faceted Australian Financial Service company. This company ranked car accident claimants by their star sign in a study of 160,000 accident claims over a three-year period.
This study, released in 2002, was carried out as part of Suncorp’s annual review of claims. “We always look for trends in claims to see if there are ways to reduce our pricing, but there is no intention to introduce astrology as a rating factor for motor insurance,” explained Warren Duke, Suncorp’s national manager of personal insurance.
It is always hard to disagree with the facts – and this is what they found:
Worst driver by star sign
- Gemini May 21-June 21
- Taurus April 20-May 20
- Pisces February 19-March 20
- Virgo August 23-September 22
- Cancer June 22-July 22
- Aquarius January 20-February 18
- Aries March 21-April 19
- Leo July 23-August 22
- Libra, September 23-October 22
- Sagittarius November 22-December 21
- Scorpio October 23-November 21
- And the safest driver is Capricorn December 22-January 19
How do the personality traits of persons with these star signs explain their driving?
Worst drivers
The worst drivers – Geminis – are “typically described as restless, easily bored and frustrated by things moving slowly,” explained Warren Duke, Suncorp’s national manager of personal insurance. “They had more car accidents than any other sign.”
Second and third place holders for this dubious honor are Taurus and Pisces. “Taureans were thought to be obstinate and inflexible, “said Duke,” while Pisceans could be risk-takers and daredevils.”
Interpretation of these findings by astrologers
Astrologers have also shared their opinion and provided some interesting explanations:
Taurus
Taurus can be obstinate and inflexible, but they are also the most introverted and self-absorbed of all the signs. At a very fundamental level, the world outside the chassis of their car may not exist at all. Since freeway driving requires spatial perception and processing of much abstract information (speed, flow and distance), this is counter to their natural way of processing the world around them.
Pisces
Pisces, in the number three position, is the other sign that lives in a world of its own. Duke describes them as potential risk takers and daredevils. Pisces are the gentle dreamers of the zodiac. They may spend many hours a day in fantasy worlds, escaping the painful realities of life on the physical plane and, more often than not, the pain of being in a physical body. They often experience the whole manifest world as an illusion and their presence in it as temporary and of little importance.
This Pisces detachment from the physical can lead to unconscious feelings of invulnerability or invincibility, also to unconscious feelings of victimization and sacrifice. If you are momentarily deluded into thinking you don’t have physical limits, and that your life is but a fleeting moment in the eternal life of the soul, you can respond to situations of physical danger in illogical ways. Or, at the very least, be slow on the uptake.
The Best Drivers
Capricorns
They came last on the list of accident claimants and are typically described as patient and careful. It’s no surprise Capricorns are the safest behind the wheel. They’re the safest at everything! Their patience and sense of responsibility are legendary.
Sagittarians
Sagittarians may stay safe in their cars the same way they do in life, by having superbly developed higher minds. Another name for this mind is intuition. The highly developed sense of flow and good timing characteristic of Sagittarians is what makes them the lucky sign. Furthermore, their minds are right at home dealing with traffic patterns, flow and spatial relations.
Scorpios
Scorpios may stay safe because they are intimately involved with the inner lives of others in the same way their opposite sign Taurus is defended against this information. Scorpios are sensitive to energy— whether it is a foot away or thousands of miles away—and can feel someone “coming up from behind” at many different levels. That’s why we always feel like they can see right through us. They can.
Scorpios would be the drivers who would instinctively “wake up” in time to let a cocaine addict pass them at 95 or give a wide berth to a passive aggressive soccer mom hassling two kids in the back seat and a phone conversation with her husband all at the same time.
[Comments on the star signs by Nancy R. Fenn, a fulltime professional astrologer for more than 25 years]
What are the effects of your star sign on your car insurance premiums?
Vehicle owners need not worry that their start sign will make their insurance premiums more expensive. If you, your spouse or colleague is a Gemini, Taurus or Pisces –now might be the time to check on your car insurance policy. It might – on average- be more important to have good car insurance!!
 There is no doubt that our weather patterns have changed! We experience cold in November and sudden hail storms where we would never expect them! I remember how in 2000 my Ford Bantam was literally destroyed by a hail storm in Bloemfontein – and this was no ordinary hail! Instead of the usual small rounded hail stones, these were large crystal shaped stones that damaged traffic lights, neon signage etc.
I am today still driving this Ford Bantam with the evidence of hail damage all over the vehicle. I simply was not covered for this damage, paid my school fees and have learnt my lesson! Are you covered?
Mutual & Federal, one of South Africa’s leading short-term insurers warns about the dangers of not having adequate insurance cover for this force of nature.
“The Summer season has definitely announced its arrival loud and clear this year, and the whole of South Africa has been hit by storms recently. Considering the amount of damage that has resulted from these storms, it is vital to check your policy and ensure that you’re adequately covered,” advises Sedick Isaacs, Mutual & Federal Executive General Manager: Claims. The devastation and destruction left by a major hailstorm is not only unsettling but it could also leave individuals financially crippled if they are not sufficiently insured.
The probability of having your property damaged due to a massive hailstorm is quite likely – and with unpredictable weather there is only one true prediction to be made – You WILL suffer damage if you are not insured! There is nothing worse than being stuck in congested traffic and being pelted with hail stones!
Isaacs continues, “Unfortunately we cannot predict when or where massive hailstorms are going to hit. However, we are able to mitigate these risks by protecting ourselves against the financial implications of such damage. “
 Isaacs encourages all short-term insurance policyholders to read their policy documents carefully to be certain of the extent of the cover provided. They can also contact their brokers or insurance advisers to check for any policy limitations and to ensure that they are adequately and fully covered.
We have in the past on the car insurance blog referred to the need for detailed analysis of the fine print on car insurance policies. Even more important is the need to communicate with your insurer or broker. Do not wait – contact your insurer today and request written confirmation that your vehicle is insured against hail damage!!
 The South African media witnessed uproar last week after comments made by Gauteng Chief Magistrate Daniel Thulare. The magistrate was quoted in the Sowetan as saying that that “any conviction for a citizen driving without a licence will be unlawful if the state has failed to test that person”. This in effect is saying that that you can drive without a driving licence if you can prove that your learner’s licence has expired after you tried to be tested several times but to no avail.
Transport Minister Sibusiso Ndebele has reacted immediately and indicated that the Department will be referring to the Magistrates’ Commission the comments attributed to Magistrate Thulare. Minister Ndebele said that the Republic of South Africa is one, sovereign, democratic state founded on, amongst other values, supremacy of the constitution and the rule of law.
What does the law say about driving without a license?
According to the National Road Traffic Act (Act 93 of 1996), any person who drives a motor vehicle on a public road must be in possession of a valid driving licence. Therefore, it is illegal to drive a motor vehicle without a valid driving licence. In the event of a collision, the driver will be charged for being unlicensed and a civil claim for damages may also be instituted against an unlicensed driver. An unlicensed driver not only poses a threat to his/her own safety but also to the safety of other road users.
The Department of Transport warns road users that any driver who is not in possession of a valid driving licence will be arrested.
What are the insurance implications when driving without a valid drivers’ license?
The South African Insurance Association (SAIA) has also noted the comments by Magistrate Daniel Thulare and expressed concern:
“Whilst it is acknowledged that there are challenges in the driver’s licence booking system, the SAIA cannot support the statement made by Judge Thulare. It is against the law to drive without a valid driver’s license. Insurance policy terms and conditions support the law of the country, and require that a driver authorised to drive an insured vehicle should hold a valid driver’s licence.
The insurance industry will not honour any claims where individuals driving a vehicle are not in possession of the relevant valid driver’s license, as required by the terms and conditions of the policy,” says Refilwe Moletsane, SAIA Deputy Executive.
“If a driver is a learner licence holder, the laws pertaining to learner licence drivers should similarly be adhered to,” continues Mrs Moletsane.
The SAIA urges all motorists on South African roads to do their utmost to abide by the law and to not be tempted to drive without a valid driver’s license. In addition, the SAIA urges the Department of Transport to address the issues around the licensing system as a matter of urgency in order to alleviate any problems.
We would like to warn all road users to abide by the law – and the law states clearly that you may only drive when in possession of a valid license or learner license. Your car insurance policy will not protect you from damage caused if the driver is not in possession of such a license!
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