Car insurance used to be simple to understand. Then again, so did cars… Now, we’ve got 4-wheel drive, luxury SUVs, smart cars, eco boost options, sedans built like tanks, and let’s not forget that driverless cars will soon be coming our way. Talk about being spoilt for choice.
Car insurance has had to develop just to keep up and be fit to serve the different types of risks that these newer (and often more expensive) cars face. Ultimately, no matter how innovative and diverse the insurance options have become, the goal has remained pretty much the same: To ease financial burden that can occur when disaster strikes.
Here’s what you need to know about the car insurance options that are on offer, so you can check if any of them are right for you.
The cheapest, most basic car insurance option: Third party only
So, you’ve been presented with the family car which has been through a few hands, or you’ve bought a skedonk for a couple of thousand and it’s probably worth less than even that… Whether you’ve inherited a free, older (read: ancient) car or saved up for a cheaper set of wheels (read: freedom), you might think that insurance isn’t worth it.
This isn’t true. According to leading insurer, King Price, some cover is way better than none. After all, a car accident might not just affect *your* car. There could be other drivers, passengers, property, and cars, and you could be liable for all the costs related to their damages and injuries. This is where third party only insurance has your back.
The easiest explanation of this option
Third party only insurance covers you for any damage or injury that you accidentally cause to others while driving. From a legal perspective, this means that your insurer will cover liability for injury to other people or damage to their property as a result of an accident.
A little bit of this, a little bit of that: Third party, fire, and theft
As the owner of a slightly older, cheap and cheerful ride that’s fully paid off, you might not be in the market for pricier insurance that comes with all the bells and whistles. That’s understandable. However, this isn’t just a car that we’re talking about. It’s your freedom, and your ability to get to work and back, to see friends and family, and to not be dependent on anyone. And… It’s your baby.
What you need is third party, fire and theft. Just like third party only insurance, liability for injury to other people and damage to their property as a result of an accident is covered. But unlike third party only, you’ll also have cover for theft and hi-jacking, as well as any loss from fire.
What it won’t cover is accidental damage to your own car.
The full Monty: Comprehensive cover
If your car is financed, then you’ll know that you need comprehensive car insurance as part of your agreement with the financial institution. But what if your car is paid off? Does that then mean that you should automatically go for the cheaper options?
Not necessarily.
Even if you aren’t obliged to take out comprehensive cover, it’s still worth it if your car is relatively young and worth a substantial amount. Like a 2010 Toyota Fortuner with around 200km on the clock. In this case, accidental damage to your own car probably wouldn’t be something that you could afford to pay out of your own pocket to repair or replace.
Comprehensive car insurance covers loss or damage caused by:
- An accident.
- Someone else, intentionally.
- Theft or hi-jacking, including attempted theft or attempted hi-jacking.
- Fire, explosion, earthquake, storm, flood, freezing or snow.
- Animals (generally excluding domestic animals and pets).
With this policy, you can keep your car in pristine condition and put yourself back in the position you were before the incident happened… Without affecting your own pocket.
Speaking of your pocket, there’s something else new that’s recently been introduced in the form of a cheaper comprehensive car insurance option.
Decreasing comprehensive insurance premiums
The latest thing to hit the car insurance industry in South Africa (and perhaps even in the world) is decreasing premiums. King Price introduced decreasing premiums with their comprehensive car insurance in 2012, making the offering somewhat recent.
The royal insurer feels that it’s only fair that you pay a price that fits your car’s decreasing value.
How decreasing premiums work
Basically, if you choose their comprehensive option, your premium will automatically decrease every month, as the value of your car depreciates. This means that every month you pay less, which is pretty revolutionary.
These options can be a lot to take in. Thankfully, King Price categorises their car insurance options on their website with a star ranking and a handy explanation, which helps you spot the type of cover that you need. And if you’re still not sure what you need, then give the royal insurer a call on 0860 50 50 50.
Their super friendly, royal consultants will provide quotes for each type, outline how the price you pay relates to the increased cover, and explain how you’ll benefit.