Posts Tagged ‘Car Insurance Advice’

On the Car Insurance Blog we strive to assist vehicle owners in avoiding accident claims, to provide information on what to do in the event of an accident and also to advise when those accident claims are rejected by their car insurers.

Perhaps the most important aspect remains however to increase awareness of the relationship between car insurance and road safety, and to urge vehicle owners to insure their vehicles against the risks of property damage and loss!

In South Africa car insurance is not enforced through legislation – and the sad truth is that only approximately 30% of vehicles on our roads are in fact insured!

Where do I start if I need car insurance?

The good news is that you have already started! By reading this blog post you confirm that you have either considered finding car insurance – or you are trying to find out more about car insurance. We could briefly summarize the early steps as follows:

Considering what is car insurance

There is no value in searching for something if you have no idea what you are searching for. We cannot guide you to right place to find something if you do not know what to look for when you get there.

You would either have been asked about whether your vehicle is insured, were urged by someone to find car insurance or have experienced a situation prompting you to find car insurance.

For anyone who has become a vehicle owner, it is most important to understand the basics of car insurance and to start the process of discovery that will ultimately lead to the correct car insurance product for that owner!

Why do I need car insurance?

In South Africa we are threatened daily by the risk of property damage and loss. We have grown up in this reality and live in gated communities, have alarm systems installed in our houses and observe security guards patrolling our neighbourhoods and shopping centres.

It is only logical that a vehicle owner will also reflect on his car and how to protect this car. Not only should it be protected from criminals and vehicle theft through layered vehicle security systems – but also through a car insurance policy!

With 10million vehicles on our roads, many driven by unlicensed drivers – the risk of accidents are considerable! In 2008 we suffered no less that 14,057 road fatalities – and tens of thousands more accidents took place on our roads.

Past versus present car insurance

The process of finding car insurance might differ significantly to that of the vehicle owners of 20 years ago. In the early years of vehicle ownership there were only a few well known brands around – and they were the trusted brands for our parents. You would most probably have approached an insurer on the recommendation of a parent or friend who have been loyal to that brand for a number of years.

There were only limited choices available amongst both providers and products. This has changed significantly with the development of the internet and online businesses.

Today we find hundreds of insurers competing for a limited number of vehicle owners. We can find car insurance through brokers, direct insurers, insurance aggregators, comparison websites etc. You can do so by meeting with a broker, requesting a quote online or merely making a telephone call!

Conclusion

Car Insurance has become a maze of products and providers. Even though competition is good for the consumer, and every owner should be able to find the appropriate product for his specific needs – this might be challenging for the less skilled vehicle owner. There are simply too much jargon, clauses, and finer technical details to allow for easy comparison of terms, conditions and benefits.

We will strive to assist our vehicle owners in a short series of blog posts titled “Finding car insurance”, and discuss the process of finding car insurance in an easy to understand manner from the very start to signing on the dotted line!!

I have come across an interesting Blog Post titled “Life changes can affect your car insurance”. There are indeed many life changes that could affect your risk profile and car insurance premium – and we would like to share a few thoughts on just one of these changes – Your marital status!

Basics of the Car Insurance contract

To understand why your marital status is important for car insurance, we need to briefly reflect on the basics of how your car insurance premium is calculated. The actuaries at insurance companies have developed mathematical/ statistical models to establish specific risk categories.

This will determine the risk that a specific group of insured clients will present to the insurer – or in simple terms – the chances of receiving accident claims from these clients. These risks are covered by the car insurance company at the payment of a car insurance premium.

It is important to recognize that these risks vary from time to time – and this could be explained with reference to a few of the following variables:

Changes in the insured vehicle

The cost of the insured vehicle might depreciate – or a more expensive vehicle might be purchased and might need to be insured, additional vehicles added etc

Changes to the regular/ designated driver

• The regular driver might change or a new regular driver might be added etc
• The regular driver will get older or a child might be added as a regular driver

Changes in usage of the vehicle

• The vehicle might be driven in a new “risk area”, i.e. new town or city.
• The purpose of use might change from business to private use or vice versa

Change in vehicle security considerations

• The vehicle might have security systems/ tracking devices removed or added.
• The safekeeping of the vehicle might change from an enclosed garage to an open bay parking etc.

Marital Status and Car Insurance

The above variables are closely related to the marital status of the vehicle owners. We can discuss this with reference to the following scenarios:

Getting married

Shortly after the fairy tale wedding a couple will need to consider their financial and insurance needs. Most couples will cancel individual policies and initiate new ones as a married couple. There might well be significant savings by insuring your home as a married couple and by having two drivers on one car insurance policy.

Moving into a house together might also provide evidence to better vehicle security in an enclosed security complex, enclosed garage etc, depending on the unique circumstances of the couple. The couple might purchase a new vehicle or both might become regular drivers of both their vehicles.

Getting divorced

Divorce can also affect the price you pay for car insurance. After the divorce you and your former spouse will both need to get your own car insurance policies. Depending on your circumstances, you may need more or less coverage. The parent who has custody of a teen driver, for example, may need to pay more.

It is of the utmost importance to carefully consider the terms of a court order or agreement between the parties. Such an agreement would stipulate who is responsible for the payment of a vehicle, car insurance premiums and whether the monthly payment for a vehicle tracking system is catered for etc.

It might well be that one of the parties relocate to another town or “risk area”, change employment or move in with another party who might also become a regular driver of such an insured vehicle.

Advice to people changing their marital status

It is important to remember that these facts are only known by the insured vehicle owner and not the car insurance company. The car insurance company has no way of guessing what is going on in the personal lives of their clients – and only provide cover under the terms of the insurance contract based on the material facts disclosed by the vehicle owner.

If these material facts change, the insured vehicle owner is contractually obliged to disclose this to the car insurer. Failure to do so could result in an car insurance claim being dismissed on account of breach of the car insurance contract.

When last have you checked your car insurance contract?

We would like to advise all vehicle owners to ensure that the information on their car insurance policies is indeed correct. Life changes and shit happens – avoid tears and frustration by communicating with your car insurance company to secure your financial well-being!!