Factors to think about before buying car insurance in South Africa
The Automobile Association of South Africa (AA) stated that of the 11.4 million vehicles registered in South Africa, about 70% (+/- 8 million), have no insurance cover.1 It’s easy to shrug off the need for car insurance, saying it’s too expensive and accidents only happen to others. There are serious financial repercussions should you crash without any cover. Such as, costs to third-parties, loss of mobility to name a few.
If you’re an owner or driver of a car you need to consider the following factors when buying insurance for your car.1
- What will your car insurance cost?
Most people need to know this for their budget. First, list what you need to be in the policy that will suit you. 1 For instance, can you afford to have no car for 2 weeks while they repair it? 1 Can you afford to be stuck on the side of the road after a breakdown? 1 If the answer is no, ensure the policy includes a car hire option and 24-hour roadside assistance and towing service. 1
- Obtain online quotes
Never approach only one insurer and be satisfied with that. 1 Always collect online quotes from reputable and well-known companies and choose the one that suits your situation the best. 1 Check with Hellopeter if there is any negative feedback from customers about the insurer. 1 Remember to present the same information to each company so you can compare quotes. 1
- How much excess should I pay?
This all depends on what you can afford. 1 If you don’t mind paying a high premium, you’ll have a low excess to pay the insurer should you submit a claim. 1 On the other hand, if you can only manage a low monthly premium, the excess will be proportionally higher. 1 In such a case, you make sure that you’ll have sufficient cash immediately available after an accident. 1
- Do you understand the policy?
This is crucial because you need to know when you are covered and when not. 1 So, read the policy carefully, especially the fine print. 1 For example, some policies have an exclusion where the insurer won’t insure your car when driving on a dirt road. 1 If you don’t understand the jargon, contact the insurer or a broker for an explanation. 1
- What can affect the cost of car insurance?
Your driver profile or driving history is crucial to the insurer. 1 If you have a great defensive driving record over many years, you pose a low risk to the insurer. 1 Low risk equals a low premium. 1 Conversely, if you’ve been a reckless driver involved in many accidents, the premium will go up because of the high risk. 1 The car’s age, market value, and where you park at night also affect the cost. 1 The premium rises if your house is unprotected and in a high-crime area. 1
Disclaimer
Car insurance is complicated, so this article can only provide information. If you are considering buying car insurance, contact a certified financial advisor for professional advice.
Whatever you do, it’s best to buy car cover, even if you start with third-party car insurance. Some cover is better than none. Regarding affordability, PMD can offer you reliable car insurance to suit your pocket. So why not contact PMD and learn more about car insurance with unique benefits such as fixed premiums* and a reduce to zero excess*? T’s and C’s apply.
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Disclaimer:
This article was prepared by Eric Sandmann in his personal capacity. The views and opinions expressed in this article are the author’s own and do not reflect the views and opinions of Prime Meridian Direct (Pty) Ltd, FSP41040 (car insurance and life cover products). The views and opinions in the article should not be attributed to anyone but the author unless expressly stated. Nothing in this article should be relied upon as advice, this publication is presented for informational purposes only. No person should act or refrain from acting in reliance on any information found in this article, without first obtaining proper financial advice from the appropriate professional. The author makes no claims, promises or guarantees about the accuracy, or completeness, of any information linked from, referred to, or contained in this article. The author reserves the right, to edit and change the content of this article.
