Car Insurance: Frequently Asked Questions
Frequently Asked Questions
We’ve put together a comprehensive list of FAQs. Just think, in a few minutes you’ll know a lot more than you do now.
Can my age affect my premium?
Yes, the more birthdays you’ve had, the less you pay. Our experience shows that driving risk reduces with age. Youngsters drive their cars as if they have stolen them, while older drivers are more cautious and have fewer accidents. Premiums are charged according to a sliding scale, if. So, there’s something good about getting older. If you want to know more about how the premium scale works, call SA Financial Planners on 086 1111 081
Why does my premium increase every year even though the value of my car is depreciating?
You are not only covered for the theft of your vehicle, but also for its upkeep. Over time, your car gets cheaper and its parts more expensive. Unfortunately, your premium has to increase in line with these costs. Insurance companies do take the depreciating value of your vehicle into account when reviewing your premium. Cover – Market value vs. Retail value
Is it true that my marital status can affect my premium?
Yip. we’ve found that married or co-habiting policyholders pose a lower risk than single or divorced people do. This is possibly because singletons hit the nightlife and leave their residences empty until the wee hours. So, settling down with the Mrs has its perks.
If I cannot afford my premium this month, can I pay double next month?
Sometimes you may find it difficult to meet the premium payments on the first working day of the month. In order to help you out, you can set aside a ‘Special Deduction’ on a date, which is more convenient. However, if the premium is not received by this date, you will have no cover for that period and the policy will lapse.
Why do women enjoy a discounted premium?
Men always claim to do things whole-heartedly, even in accidents. There are no half measures. Statistically, women are better drivers and are involved in less car accidents than men are. Plus, the cost of repairs to vehicles crashed by women is, on average, lower than the cost of damage caused by men.
Can I insure two separate addresses on one policy?
Nope. You would have to insure the addresses on separate policies. This is because different addresses present different risks and you would pay different premiums for each address.
What factors are taken into account in determining what premium I pay?
Numerous things are taken into account, including:
- the make and model of your vehicle
- where you live
- where your vehicle is parked overnight
- who is the regular driver of the vehicle
- for what purpose is your vehicle used
- your previous claims history
- Market Value vs Retail value
Because your premium is calculated on these facts, it is very important that you answer all questions honestly. If you are unsure of a question, rather advise the consultant and get back to him later.
Fraud costs the insurance industry millions every year and in turn costs you, the honest consumer, in increased premiums. Fraud ranges from claiming a leather jacket you never owned after a break-in to claiming a car that was allegedly hijacked when it was actually sold. If you don’t want a criminal record to tarnish your name and reputation, just tell the truth. It’s better, and safer,
What is an excess?
An excess is the amount you have to pay in the event of a loss and is the uninsured portion of your loss. The excess serves to prevent customers from submitting minor claims as well as fraudulent claims and assists in keeping premiums down. When you submit a claim, you will have to pay an excess, irrelevant of who was to blame for the accident. It is important to read your policy documentation regarding excesses as there may sometimes be additional excesses depending on the facts of your claim, e.g. who was driving your vehicle at the time of the loss, etc. In most cases, we offer a flat excess as opposed to an excess that is a percentage of your loss.
What is a No Claim Bonus?
This is a discount given to drivers who have enjoyed continuous comprehensive cover and submitted no claims for four years – that’s 1460 days! An unbelievable triumph especially on our roads riddled with potholes, construction and taxi drivers who think that the N1 is F1. An interruption of insurance for no more than 39 days will still qualify as continuous cover. Claims for window glass, sound equipment and hail damage do not affect the No Claim Bonus.
How can I reduce my excess?
By paying a higher premium. Some insurance companies offer No Excess terms and conditions subject to a hurdle amount which means an excess will apply to claims smaller than a specified amount.
Why do I need to install a tracking device in my vehicle?
Tracking devices reduce the chances of your cargoing missing, and it assists in the quick recovery of your vehicle if it is. As the risk is reduced, in the event that you claim for a stolen vehicle, you will enjoy a reduced theft excess.
Am I entitled to a pro rata refund if I cancel my policy in the middle of the month?
Insurance policies are payable monthly and you pay for cover a month in advance. Therefore, insurance companies are not able to refund you if you cancel the policy during the course of a month – sorry!
If someone drives my vehicle without my consent and is involved in an accident, will you still pay my claim?
Yes, if you lay a criminal charge against that person with the cops, within 48 hours. You may not withdraw the charge, even if a friend or family took your wheels for a joy ride. This can be avoided by adding friends or family members as a regular driver on your policy
Why do I have to pay an excess if I was not at fault?
An excess is payable whenever a claim is submitted and is the first payment that needs to be made in the event of a claim – regardless of whether you are guilty or not. The administrative cost of a claim is the same, regardless of who is at fault. If you are not at fault, you can claim the amount back from the other party. Unfortunately, this can take a long time, especially if the guilty party isn’t insured. Legal recovery departments will do their utmost to recover your excess free of charge.
There are certain circumstances when an excess can’t be recovered, for example:
- the insured doesn’t have any third party details
- the third party doesn’t have any income or assets
- the legal costs outweigh the recovery costs
- the third party can’t be traced
- the merits of the claim don’t justify the recovery
Why do I have to pay more than one excess?
Your insurance contract covers various levels of risk. For instance, if your vehicle is involved in an accident, and the person driving the vehicle at the time is not the regular driver, we will charge an additional excess as that driver is not the driver on whom the premium is based. These levels determine the excess that needs to be paid.
Where can I learn more about insurance?
You can download the SAIA’s (South African Insurance Association) educational pamphlet or their educational book.