Posts Tagged ‘Car Insurance Advice’

Car Insurance might become too expensive for the elderly to keep driving

Written on June 7th, 2010 by admin
Categories: Car Insurance Advice

car-insurance-might-become-too-expensive-for-the-elderly-to-keep-drivingWe have all experienced the reduced driving ability of an elderly relative. As our grandparents get older – so do their ability to be safe on the roads. This is something that concerns us all, and poses the question as to how to stop them from driving…?

On the Arrive Alive Road Safety website we have given attention to this topic in a section titled “Road Safety and the Elderly / Older Road Users”. This section focuses on the health and safety risks – and not on the financial impact that might result from accident claims and increased car insurance premiums.

It is true that the cost of car insurance for the elderly sharply increases later in their lives.

Kelly Green, in an article in the Wall Street Journal summarizes this position rather neatly as follows:
“If there is compelling evidence that parents shouldn’t be on the road—because of failing eyesight or other physical limitations—then adult children shouldn’t want them to drive. People who are 75 and older have higher crash rates per mile than all groups except 16- to 25-year-olds, according to the Insurance Institute for Highway Safety. Many states require older drivers, starting in their 60s or 70s, to renew their licenses more frequently than younger drivers, to do so in person or to take additional vision tests. Still, health and driving skill can deteriorate between those renewal dates.”

But why are the car insurance premiums so expensive and are the elderly road user such a concerns for road safety authorities? Perhaps the best answer is to be found in a few facts and numbers for the Arrive Alive website:

  • As the elderly are less agile and resilient, the likelihood of being killed as a pedestrian is more than twice that for younger adults.
  • Every fifth person killed on roads in Europe is aged 65 or over – it is estimated that by 2050 one death out of three will be an elderly person, if their safety level does not improve.
  • The elderly are more likely to be severely injured or killed in a crash. The fatality rate of the 65-74 year olds is about twice that of the 30-64 year olds. The fatality rate even is eight times higher for the over-75s.
  • With the same impact force, the death rate is approximately three times higher for a 75 year old motor vehicle occupant than for an 18 year old. The physical vulnerability has the severest consequences during ‘unprotected’ journeys such as walking and cycling.
  • Older drivers find it more difficult to judge the speed and intentions of other drivers. From the age of around 45 most of us need glasses to see well either at a distance, close up or for both. For example, by around the age of 60 our eyes will normally require three times more light to see as well as when we were aged 20.
  • The fatality rate of elderly drivers is considerably lower than that of elderly cyclists and pedestrians.
  • The death rate is particularly high for elderly cyclists.

It is important for family members to be alert to the driving behaviour of parents – and to assist in convincing them at the right time that it is best to stop driving. How can family members assist the elderly road user?

  • Family members and physicians should be proactive in ensuring the safety of their loved ones on the road, especially if they are afflicted or impaired with a condition that may hinder driving abilities.
  • Friends should flag a friend who might be driving unsafely and pose a risk to other road users
  • Family members might be in the best position to convince the elderly to go for a medical assessment and check on the important physical abilities required for driving

It is also important not only to remove the keys – but to be pro-active in organizing other transport and to assist in maintaining the mobility of the elderly road user. This includes the process of seeking accommodation where transport is less of a requirement or reducing the need to travel to shopping centres far away!

We would like to urge all the family members of elderly road users to also view:
Road Safety and the Elderly / Older Road Users

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Are you ready to share the road with foreigners during the World Cup?

Written on May 31st, 2010 by admin
Categories: Car Insurance Advice, Road Safety

Are-you-ready-to-share-the-road-with-foreigners-during-the-World-CupWe have referred to the importance of having your car insurance sorted before the Football World Cup. We have addressed the dangers of lending your vehicle to foreigners – and have also alerted vehicle owners to some additional road risks.

These were discussed in these blog posts:

Some alarming facts have come to light in a story in The Independent on how much some of these visitors might know about the Rules of the Road!

Insurer AXA is warning British motorists driving overseas to swot up on local road rules or face fines, arrests or accidents. A third of motorists admitted that they don’t know whether a GB sticker is a legal requirement.

Some of the interesting survey results include:

  • Nearly half, 49 per cent, were unsure whether their car insurance covered them for driving abroad, with 23 per cent making the potentially disastrous assumption that it does.
  • Bizarrely, 40 per cent of motorists think that it is legal to jump a red light in Italy, while 37 per cent think its right to overtake on both sides on Portuguese motorways.
  • Meanwhile, just over one in five, 22 per cent, wrongly stated there was no need to carry a reflective jacket and red triangle in your car in France, while 48 per cent incorrectly believe that you must carry a petrol can in Spain.

Craig Staniland, AXA Insurance director, said: “While some of the misconceptions we have about driving abroad are amusing, there are some serious misunderstandings that could lead to breaking the law or a serious accident.”

We would like to urge all our foreign visitors to study the Rules of the Road before driving in South Africa.

They might do well to view the following:

South African drivers will have to be alert and recognize that many foreign road users are aware of the unique driving conditions in South Africa. We would like to urge all to be patients and courteous to one another!

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Could Pay As You Drive car insurance save high risk drivers?

Written on May 28th, 2010 by admin
Categories: Car Insurance Advice, Cheaper car insurance

Could-Pay-As-You-Drive-car-insurance-save-high-risk-driversWe have referred on this Blog to the benefits of Pay As You Drive car insurance. To summarize briefly, this car insurance product is based on the principle “Drive a lot, pay more. Drive less and save!”

There are also environmental benefits as well as expectations that drivers will drive with more caution whilst aware that a Big Brother is monitoring their driving. In this Blog we would like to focus on a specific group that might benefit from a Pay As You Drive car insurance product – The High Risk Driver!

Who are the high risk drivers?

I would like to refer to the Blog post titled “Why do young and elderly drivers pay so much more for car insurance?”. In this Blog post we have identified the younger drivers [ 18-25 years] and the elderly drivers [65 years+] as the highest risk to car insurance. It is important to recognize that this is based on actual accident statistics.

If any driver in these age groups requests a car insurance quote, he/she will automatically fall into a higher pricing category before other variables such as the driving/ accident record, the area that they reside or the vehicle that they drive etc will be considered.

How can these young and elderly drivers reduce the risks of accidents?

We have offered some advice to these high risk drivers:

Advice to Younger drivers:

  • Shop around for your car insurance – make your increasing years of driving experience and age count as you get older
  • Try to maintain a safe, accident free driving record
  • Find an accredited advanced driving course recognized by your car insurance company
  • Be alert to the effect that the car you are driving might have on your premium
  • Pay close attention to vehicle security systems and safety features that could reduce your premium

Advice to older drivers

  • Try to maintain your safe, accident free record
  • Ensure that your lifestyle counts in your favour and you get recognized for the safe area you stay, your closed garage, vehicle security systems etc.
  • If you drive less – this should be recognized in your premium – enquire about Pay as You Drive Car Insurance

How can Pay As You Drive car insurance and data recorders help our High Risk Drivers?

Some of these high risk drivers might pose less of a risk when they drive much less than the average driver in this age group. Less exposure to other road users and roads risks should result in them paying reduced premiums for car insurance.

This reduced exposure to risk can be measured by odometer readings, or more advanced data recording devices. Some insurers now provide insurance products called “Pay As You Drive”, recognizing that reduced distance travelled should be rewarded with cheaper car insurance premiums.

We can illustrate how these higher risk drivers can be saved from financial hardship with a Pay As You Drive Car Insurance product:

Elderly Road Users:
Mr and Mrs Jones have retired at age 65. They have left the hectic city life and reside at their holiday home at the coast. They only travel short distances to the supermarket and only occasionally travel longer distances to visit their children. A Pay As You Drive car insurance product will recognize that they travel much less and provide cover for the reduced exposure to road risks!

Young Drivers
Not all young drivers are exposed to the same risks. Jane is a 23 year old student who travels to University about 500km’s away from her home in a rural area. Whilst attending to her studies she resides in a hostel on campus. She walks to classes and only travels long distances when returning home for the holidays. She travels short distances now and then when going shopping in the city. She is much less exposed to road risks than her friend who, at the same age is working as a sales rep for a pharmaceutical company. Her Pay As You Drive insurance product calculates her insurance premium on the distance driven each month.

It is also possible that when the young driver is not the owner of the vehicle, but described as the regular driver in the insurance policy, that driver would be more cautious knowing that the vehicle owner/ parent has access to a report on her driving as provided by the data recorded in the vehicle.

These data recorders or black boxes measure how fast the car is going and how long it is being driven for. It sends this information back to the insurer, which will use it to work out people’s premiums. New technology can even assess people’s driving styles by recording how fast they take corners and how aggressively they accelerate, meaning insurers can take this into account when working out the amount people should pay.

We would like to urge all “High Risk” drivers to shop around for their car insurance and consider the benefits of Pay As You Drive Car Insurance.

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Why do young and elderly drivers pay so much more for car insurance?

Written on May 24th, 2010 by admin
Categories: Car Insurance Advice

Why-do-young-and-elderly-drivers-pay-so-much-more-for-car-insuranceIf you have just received your license to drive, you and your grandfather might be in the same boat when it comes to car insurance premiums – You will both be annoyed with your car insurance premium and believe that you pay too much. You will most probably claim that you are a much better driver than your elderly grandfather –and your grandfather will argue that he is a much more mature and experienced driver than his adrenaline driven grandchild.

So why do you both fall in a high risk category and have to pay more for car insurance?

We have shared on this blog information about both young and elderly drivers, but believe it would be nice to compare these 2 risk groups next to one another. Both young and elderly drivers have characteristics that impact positively and negatively on their car insurance – ad we would like to share these pro’s and con’s with one another.

Young Drivers [18-25years]

Factors/ Characteristics that reduce the risk of accidents

  • Good physical shape and driver fitness
  • Good eyesight and strong reflexes

Factors/ Characteristics that increase the risk of accidents

  • Tendency to be risk-takers and likely to be “showing –off” and be influenced by peer pressure
  • More likely to be distracted by cell calls, texting, passengers and loud music
  • Likelihood of driving drunk
  • Driving late at night

Elderly Drivers [65+ years]

Factors/ Characteristics that reduce the risk of accidents

  • Much less distance driven by the elderly
  • The elderly adapt their driving to avoid congested traffic and late night driving
  • Many years of driving experience
  • More likely to concentrate on the road and less likely to be distracted

Factors/ Characteristics that increase risk of accidents

  • Reduced physical ability and fitness to drive
  • Reduced eyesight, hearing and slower reflexes
  • Increased anxiety – especially in congested driving conditions
  • Even though they have many years of driving experience – this was done when exposed to much less congested traffic.

How do the accidents caused by young drivers compare to those of elderly drivers?

Researchers at Kansas State University recently released findings from a crash study amongst different age groups based on involvement and severity.

It was found that even though seniors drove less than younger drivers, their car accidents were more severe, often resulting in injury or death. Compared to the rest of the population, older drivers had the highest incidence of fatal, incapacitating and non- incapacitating crashes, the highest percentage of crashes in daylight, and the highest incidence of accidents at intersections.

The study found that most elderly driver accidents occurred in traffic and often involved hitting another vehicle while driving straight ahead or making a left-hand turn. Younger-aged drivers are more likely than the elderly to drive off the road and hit something.

Conclusion and advice to these age groups

It is internationally accepted that young drivers and elderly drivers will always pay more for their car insurance. It should however not merely be accepted as such – there are still ways for these drivers to reduce car insurance premiums.

Advice to Younger drivers:

  • Shop around for your car insurance – make your increasing years of driving experience and age count as you get older
  • Try to maintain a safe, accident free driving record
  • Find an accredited advanced driving course recognized by your car insurance company
  • Be alert to the effect that the car you are driving might have on your premium
  • Pay close attention to vehicle security systems and safety features that could reduce your premium

Advice to older drivers

  • Try to maintain your safe, accident free record
  • Ensure that your lifestyle counts in your favour and you get recognized for the safe area you stay, your closed garage, vehicle security systems etc.
  • If you drive less – this should be recognized in your premium – enquire about Pay as You Drive Car Insurance

We would like to invite all our young and elderly drivers to view the Car Insurance Blog for more information on car insurance advice and road safety advice to keep them safe on the roads!

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Where do I find car insurance advice and educational information?

Written on May 18th, 2010 by admin
Categories: Car Insurance Advice

Where-do-I-find-car-insurance-advice-and-educational-informationHave you ever considered where the average Joe will find information with advice on car insurance? When we refer to this information we do not refer to car insurance advertisements or invitations to find a specific car insurance provider, but rather to advice on important aspects such as:

  • How do I interpret the terms and conditions in a policy?
  • What are the typical pitfalls and fine print to be aware of?
  • What are my obligations in the contractual agreement with the insurer?
  • When and why might the insurer refuse to make payment in the event of a claim?
  • What do I do if I believe that I have a legitimate claim and the insurer rejects such a claim?

Insurance Information and advice on the Internet

It is easy to find information about car insurance on the internet. A search for the term car insurance will deliver thousands of links from insurers and bloggers. To find valuable and insightful answers to the questions raised above might however be a bit more difficult…!

Most bloggers and marketing efforts are geared towards attracting customers and convincing visitors to change their car insurance to a new provider with a unique offering. This is why we can expect to find a focus on terms such as:

  • cheaper car insurance
  • affordable car insurance
  • best car insurance etc.

To provide advice and education are lower on the list of priorities for the marketing departments at car insurers. Providing advice and education do not bring in the money and do not pay the salaries. This does not convince a vehicle owner to submit his details and request a quote – and marketers, to put it rather bluntly, need to generate quotes –not teach vehicle owners! There are no prizes for educational efforts and for the most informed clients!

Financial websites / Study Courses on Car Insurance

To find advice and education visitors have to spend a bit more time and cross-reference between various providers. There are a few educational bodies such as the insurance institute, financial planning institute and other bodies providing courses with the information. You will however need to be a student and subscribe to a course to find all the course materials. You can also find answers to many questions through financial websites or by studying the decisions/ judgements by the Ombud for Short Term Insurance.

Another useful resource is the circulars from the South African Insurance Crime Bureau and publications such as FA News.

Road Safety Initiatives and Car Insurance

In June 2009 the Arrive Alive online road safety recognized the need for greater awareness of the link between car insurance and safety on our roads. It was decided to gain closer cooperation with the car insurance industry and assist our vehicle owners in their efforts to gain advice and information about car insurance. This is done via the platform provided by a car insurance blog at the domain carinsurance.arrivealive.co.za.

During the past year we have been able to provide advice and educational information to many online visitors. We would like to invite visitors to view the page created on the Arrive Alive website to illustrate how this was made possible:

We would like to invite visitors to raise their questions, and to email us with suggestions on aspects they would like to read about. May these efforts contribute to informed decisions by vehicle owners, more insured vehicles on our roads and greater road safety!!

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How does depreciation in the value of my car affect my car insurance premiums?

Written on May 11th, 2010 by admin
Categories: Car Insurance Advice

what-affect-does-depreciation-have-on-car-insurance-premiumsLast week a very important aspect was raised on the Carte Blanch Consumer program on Mnet on South African television. This dealt with the relationship between your insurance premium and the market value of your car, and more specifically the depreciation of your vehicle!

This is a very important aspect of consumer protection – the need to create awareness that the market value of vehicles declines – and the need to insure that your car insurance premium takes this fact into consideration.

This is however not a matter to be fully discussed in the available 10 minutes on television- as it also should make reference to a few other aspects of ownership of that vehicle over an extended period of time. We would like to refer briefly to a few important facts to consider in any discussion on the depreciation in value of your vehicle and the need to adjust car insurance premiums.

  • At the time of purchase of your car, the car insurance premium is calculated on the value of that car, i.e.R200,000.00.
  • Your car insurance premium is the amount payable to replace that vehicle or repair that vehicle in the event of vehicle loss or damage.
  • The market value of that vehicle declines every year – and should vehicle loss occur after a few years – the market value might have declined to i.e. R120,000 – and the car insurance policy would only pay out this amount in the event that your vehicle is stolen or written off.
  • This creates the need to monitor whether your car insurance premium should not have been reduced every year in line with the reduction of market value of your car…

Why does my car depreciate in value?

Depreciation describes the effect that wear and tear, usage, mileage and economic conditions have on the value of your car.

It is common sense that as you drive out of the dealership and start adding miles on the clock, the vehicle will be of less value to any other potential buyer. It is generally agreed that new cars lose up to 15 percent of their value once they are driven out of the dealer’s showroom.

A report on the motoring industry released in 2007 revealed that some models of brand new cars reduced by 10% to as high as 40% within the first year of ownership.

The car insurance policy only covers that market value – and not the purchase price you paid for the vehicle.
Why does my car insurance premium not reduce directly in line with the depreciation in value of my vehicle?
It is important to recognize that there are also factors contributing to upward pressure on car insurance premiums.

These include:

  • Normal inflationary pressure can increase car insurance premiums by anything between 5% -15% yearly
  • Increased perceived risks as a result of vehicle damage [accidents , potholes] or vehicle loss [accidents, crime]
  • Even though your vehicle might reduce in market value – the costs of repairing such a vehicle after an accident might still increase.
  • Vehicle parts needed for repairs might continue to become more expensive despite the market value of your car decreasing.

This is perhaps an explanation of why there is not an automatic reduction in the car insurance premium in line with the depreciation of your vehicle – and also why it might be a good idea to tie down the insurance premium for 2 or 3 years.

Advice to vehicle owners

The Ombud for Short Term Insurance has recently criticised an insurer for not mentioning in his car insurance contract renewal letter that a reduction in the value of his vehicle could result in lower premiums. It was also emphasized that a broker should not merely convey letters from the insurer to the client but advise a client of the need to review his policy.

We would like to advise vehicle owners as follows:

  • Tell your insurer or broker that you want your car insured at its market value.
  • This is the amount a reasonable buyer would pay for it and is based on research published by Mead and McGrouther – this is the mysterious “blue book” dealers often refer to when they are evaluating your car for a trade-in.
  • Motorists must, at all costs, avoid insuring their car below the actual value in an effort to save on insurance premiums.
  • Don’t leave it up to the insurer to reduce the value, review your insurance yearly and ask them to implement the change.

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Is it safe lending your vehicle to World Cup Visitors?

Written on May 9th, 2010 by admin
Categories: Car Insurance Advice

Is-it-safe-lending-your-vehicle-to-World-Cup-VisitorsFootball supporters will be transported on all possible modes of transport during the World Cup. We can expect many tour groups on buses, thousands of rental vehicles and the usual private transportation. We have addressed on the car insurance blog the need to check car insurance before the World Cup – and also the road safety advice provided on the Arrive Alive website for our road users during the World Cup.

Many South Africans would have offered to assist friends and family from abroad with accommodation and even transport – and we need to ask – is this safe? We are not referring to the usual road safety advice – but rather the need to investigate whether this could have negative financial and legal consequences on the vehicle owner….

There are 2 very important aspects to consider when lending your vehicle to foreign visitors:

  1. Car insurance and whether your policy protects the vehicle owner
  2. Whether the driver will be transporting passengers within the Rules of the Road and Licensing Laws

[In this investigation we would like to refer to some insights from another publication – FA News, 14 April 2010.]

Car Insurance and lending your vehicle to other drivers during the world cup

Every vehicle owner should be aware that his car insurance policy and the insurance premium payable under such a policy is calculated after disclosure of specific risk factors present at the time when the agreement is concluded.

There is an obligation on the policyholder to notify the insurer when these risk factors – such as the identity of the designated driver changes – and failure to do so could nullify the agreement. The consequences for the vehicle owner could be disastrous if the correct car insurance cover is not in place!

“If a foreign visitor without a valid South African or international license drives your car and crashes into another vehicle you will have to pay for your own damage and may also be liable to pay for the other parties‟ damage and injury” says Gari Dombo, Managing Director, Alexander Forbes Insurance.

It is important to “check whether your motor policy is restricted to nominated drivers, or if it covers all drivers as, depending on the wording of your policy, your insurer may not pay out in the event of mishap” warns Dombo.

It is of the utmost importance that vehicle owners allowing others to drive their cars during the World Cup, communicate with their car insurance, disclose these factors and ensure that the necessary cover is in place!

Licensing Requirements for those driving in South Africa

It is even more important to check whether the driver of your vehicle is indeed licensed to drive on the roads of South Africa. You will only be insured if you are legally allowed to drive – and may face the wrath of the law if you drive without a valid license!

Keep in mind that:

  • Some foreign licenses are not valid in South Africa and their holders are therefore not licensed to drive while travelling in South Africa.
  • South African authorities accept a drivers‟ license that is current in the country of its origin and valid for the driving of the same type of vehicle that is to be driven in South Africa – as long as the license is written in English and bears the driver’s photograph.
  • If an unlicensed driver causes damage, injury or even fatality you may end up in court for allowing your overseas guest or friend to use your vehicle.
  • If you are unable to pay the damages you may have your assets attached to settle liabilities.
  • Most car insurance policies exclude carrying of fare paying passengers or carrying of passengers for reward. So, if you are thinking of charging foreign guests (or taking any kind of reward) for drop-off services you must check whether your insurer covers this since you would need a PDP drivers license to do this legally.

Advice to vehicle owners considering lending vehicles to foreigners

Alexander Forbes Insurance advises asking a few questions

  • Is the tourist a licensed driver?
  • Is the license acceptable in South Africa?
  • Are they familiar with the rules and regulations of our roads e.g. driving on the left hand side?
  • What is the risk profile of the driver (age, experience etc?)
  • How many people will be driving the car? The more people you nominate as drivers, the more you will pay on your insurance premium.
  • Do you know the history and driving competence of the person you are lending your vehicle to? It’s always better if they have been referred by somebody you trust and you have done a security test.
  • Are you covered for third party liability in the event that someone else who is driving your car causes damage to property or even death?

We would like to advise that you communicate with your car insurer to confirm that you are keeping to your side of the contractual agreement. It is better to have a temporary change to the terms or an increase in the car insurance premium [or additional excess] than to be held liable for damage, injury or death due to the behavior or driving status of the foreign guest that you lent your vehicle to – or those tourists that you injured while driving them to a match for reward.

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Cancelling car insurance should be the very last resort for the elderly

Written on May 6th, 2010 by admin
Categories: Car Insurance Advice

Cancelling-car-insurance-should-be-the-very-last-resort-for-the-elderlyWe have discussed on the Car Insurance Blog at carinsurance.arrivealive.co.za the elderly and their need for car insurance. We have identified this age group as a specific risk grouping and also referred to the fact that they do not contribute to significantly more accidents than other age groups.

This is mainly as a result of their ability to adjust their driving with specific reference to:

  • reduced driving distances
  • driving at times when roads are less congested
  • the value of their driving experience

The elderly vehicle owners are struggling financially

We are living in challenging economic times – and no-one struggles more financially in these times than the elderly. It has been revealed that South Africa’s low interest rate climate is putting the squeeze on some senior citizens.

Most of them are dependent of fixed incomes and are increasingly tempted to economise on household costs by cutting or cancelling their short-term insurance – sometimes with disastrous results.

Some insurers have gone to great lengths to warn the senior citizens about the dangers of senior non- or self-insurance.

FNBIB General Manager Marketing, Debbie Barret has revealed the full impact of low interest rates on pensioners who are dependent on fixed interest investments for retirement income:

  • They are desperate to reduce monthly household costs and are cutting non-essentials.
  • Unfortunately, they sometimes cut back their monthly insurance premiums, too. The consequences can be disastrous.
  • There is already anecdotal evidence of old people who suffer severe damage to their houses and major losses on their household contents and have no hope of paying for proper repair or replacing their possessions.
  • The real danger is that older people making these false economies may face huge claims to cover their third-party or personal liability exposure. They could be ruined.

FNMIB provides short-term insurance advice to senior citizens

FNBIB has emphasized the need for education about these pitfalls and to stress that accident and property loss can happen to everyone!!

It is important to remember the following four basic educational points:

  1. Self-insurance is practised by some individuals, but is most appropriate for high net worth individuals who create a cash reserve and have the discipline to keep this contingency fund intact. Self-insurance for the average consumer is apt to degenerate over time into non-insurance, leaving the individual exposed to dire financial risk.
  2. In cases where individuals believe they can make a degree of self-insurance work, they should adopt a prudent and selective approach. Being uncovered for third-party and personal liability risks can be disastrous. Self-insurance in some risk categories can expose the family to multi-million-rand claims. Consumers should seek the advice of short-term insurance professionals on these issues.
  3. The experience and prudent lifestyles of some older people can result in lower risk in certain instances. This is reflected in some pricing structures. For example, some products offer special rates for older people or those living in a more secure environment. Pensioners should contact their broker to ensure they derive maximum advantage from cost-efficient provisions such as these.
  4. Regular reviews should be carried out with a broker to ensure an individual’s short-term portfolio remains appropriate to lifestyle needs. After downsizing, certain possessions may be removed from all-risk cover, for instance. As a motor vehicle ages, its market-related replacement value usually falls. By adjusting these values on the policy, it is often possible to reduce the premium. Explore options such as these in consultation with a reputable broker.

Barret noted: “It is true that some disciplined and prudent older people are less exposed to certain risks than younger people. But older people must remember that in some respects they are more not less vulnerable.
“For example, a younger person earning a salary may have the earning power to replace losses and repair damage. A pensioner reliant on a fixed monthly income often lacks the financial resources to make good a major loss.

“This is one more reason for thinking twice about any drastic cuts in your insurance provisions. This month’s cash saving can be next month’s financial disaster.”

[Source: FA News (12th April 2010)]

Advice to the Elderly Vehicle Owner

We would like to urge all senior citizens to approach their car insurance with the same caution as they do with their driving. If it is financially impossible to continue paying for comprehensive car insurance – consider taking out third party, fire and theft insurance!

Cancellation of car insurance should be the very last resort – consider other options first:

  • Compare quotes to find the most affordable premiums
  • Consider car insurance products stripped of additional benefits that you might not need
  • Remember that you are not alone – others are in the same position – do not be afraid to seek advice and assistance!!
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Check your car insurance before the Football World Cup

Written on May 6th, 2010 by admin
Categories: Car Insurance Advice

Check-your-car-insurance-before-the-Football-World-CupThis blog is aimed specifically to South African vehicle owners. Only about 30% of vehicles on South Africa roads are insured – and this despite all the unique threats to vehicle damage and vehicle loss!

These threats have been described on several blog posts. They include the risks from vehicle crashes, vehicle theft, hijacking, smash-and grab damage etc. Last week it was revealed that more than 100 stolen vehicles are taken across the border to Mozambique every week!

The whole of South Africa is eagerly anticipating the FIFA Football World Cup – and it is important that we also pause and focus on the unique threats presented by this event to vehicle owners. On the Arrive Alive website we have made available information on the topic “Road Safety during the 2010 Football World Cup in South Africa”. This is confirmation that there are special concerns and a need for safety awareness by all road users.

Why is the Football World Cup important for Car Insurance in South Africa?

It is anticipated that 300,000 foreign football enthusiasts will visit South Africa during the hosting of the World Cup. At no previous time have there ever been so many foreigners in South Africa at the same time.

These people will travel vast distances between the various stadiums and share the roads with South African vehicle owners. Even though many will travel by bus – there will also be thousands travelling in rental cars.

South African drivers need to expect the following:

  • Many foreign drivers not well acquainted with South African driving conditions.
  • Drivers who might not be familiar with driving on the left side of the road.
  • Drivers driving rental cars they are not familiar with.
  • Drivers distracted by maps and other devices as they search for their way.
  • Heavily congested roads.
  • Many intoxicated road users celebrating football success – both drivers and pedestrians.

These might be a few of the factors that could lead to increased risk of an accident. South African vehicle owners need to ask themselves the following questions:

  • What will be the consequences be of an accident involving a vehicle driven by a foreign football supporter?
  • If not insured and the other driver is at fault – how much effort will it take to claim from the car rental agency or the foreign visitor?
  • Is it not best to protect yourself against these risks?

Advice to vehicle owners

We would like to urge all vehicle owners to pause for a while and consider the impact of the World Cup. Do not be blinded only by your passion and enthusiasm – but think safety as well!

Check your car insurance before the World Cup and may you not only remember “I was there!!” – but also “I had by car protected and insured!!”

Also view: “Road Safety during the 2010 Football World Cup in South Africa”

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How much are you paying your car insurance Broker? Is that too much?

Written on April 30th, 2010 by admin
Categories: Car Insurance Advice

how-much-are-you-paying-your-car-insurance-brokerPerhaps the question is presented incorrectly – and should read – “How much is your car insurance broker getting”. The answer should be no secret – and you SHOULD be told what this amount is! The Financial Services legislation in South Africa requires that a broker disclose to the client the broker commission and this should be displayed clearly on your car insurance quote/ policy.

Why are we asking this question?

This blog post is not any attack or criticism of short term and car insurance brokers. I am at present insured through a broker at a prominent Insurance Company – and I will admit to being satisfied with my short term insurance portfolio, policy and premium.

I have written a blog post titled Are insurers making it difficult to compare car insurance quotes? and made reference to the scenario of a friend whom I believe was grossly overcharged. She moved to a direct insurer and will be saving a lot of money on her monthly car insurance premium?

Should we blame the broker or the insurer if you are paying too much for your car insurance premium?
I believe that the broker will be more at fault than the car insurance company. The commission payable to the broker is a legislated/ regulated commission of 12.5% of your premium. The car insurance company will provide an insurance quote for your vehicle – and 12.5% of that premium will be the commission payable to the broker. This is a maximum amount and may not be more.

In answering this question and analyzing whether it might be better to go “direct” and consider a direct insurer – we need to reflect on the premium, the broker commission and the role of the broker.

What is your broker delivering for his 12.5%?

Before we criticize the broker and say that a rate of 12.5% of the premium is too much to pay – we need to ask whether your broker is delivering from his side. I believe that my broker is doing his bit – and I am comfortable to reward him for his services. There might however be many vehicle owners who only see their broker once – at the time of signing the policy – and perhaps again after an accident.

The professional broker worthy of earning his commission will be the one whom we can characterize as follows:

  • He possesses a specialized knowledge in the area of car insurance.
  • He is a hard worker – preparing to spend time with the client and to discuss in detail the offerings available in the car insurance industry.
  • He will save the client money – by providing the best insurance for that specific client and that specific vehicle.
  • His services will provide a better premium – hence a more affordable 12,5%.
  • He will provide regular feedback to indicate e.g. that the market value has dropped and that the insurance premium will be re-adjusted.
  • He will be able, in the event of car damage or loss, to manage the whole claims process on your behalf and put your mind at ease.
  • This will require professionalism, good communication, swift response times etc.

Should I use a broker or is it better to go direct?

This question is not as simple as it might seem. The answer will depend on a number of aspects that each vehicle owner will have to answer for himself. There might be a definite cost saving by cutting the middle man / broker from the process – but this might not be for every consumer and every insurance portfolio.

I would like to advise that you ask yourself the following questions:

  • How much do I know about car insurance and insurance in general?
  • Do I have a rather complex short term insurance portfolio or do I only have rather basic needs and property to be protected?
  • What is my monthly short term insurance portfolio worth in Rands and cents – and how much of this is going to my broker?
  • How much is it worth to me to have a personal relationship with a broker that I know well, see often and communicate with regularly?

Conclusion

The question of whether to go the direct or the broker route should not be merely a price comparison. It should be regarded as a value comparison. You need to compare what you are getting for your 12.5% – And if that is not an affordable premium, quality service and peace of mind – then there is value in rather going with a direct insurer!

Too few consumers know what they are paying, what others are paying and what they could be paying/ saving! There is no harm in gaining quotes regularly and to reflect on your financial and short term insurance portfolio. Ask around, communicate and don’t pay more than you need to!!

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