Let’s look at how to find the best car insurance, what to consider and why there is no standard answer. No single product will work for everyone.
What is the best car insurance?
Before jumping in to all the details, it’s important to understand that what is best for me may not be best for you. I’m a middle-aged (urgh – I hate saying that) male driver and my risk profile is probably different to yours. Also, the car I drive, the average distance I travel, the suburb I live in, all play a role.
Finding the best car insurance is not just a matter of price, it depends on what you want from your insurance too. What risks are you willing to accept and what are non-negotiable?
Let’s look at some of the considerations when finding the best car insurance.
Third party vs fully comprehensive insurance
When looking at car insurance quotes you will see that third-party only insurance is much cheaper than fully comprehensive insurance. This is where your personal situation comes to play and the amount of risk that you are willing to take on yourself.
If you have a really old car that is not worth much, you may consider only taking out third party cover only. This means that you are not covered for your own car in the case of theft or an accident, but you are covered for what may happen to someone else’s vehicle. This type of insurance is usually very cheap but it implies that you are happy to take on the risk of losing your vehicle. Here’s why you need third party car insurance – at the very least.
I had third party only insurance on my previous car. It was an old VW Polo valued at around R18k. I was happy to save on my monthly premium and was in a comfortable position to cover the loss if it happened. And, I was very ready to buy a new car anyway.
Fully comprehensive insurance is needed when you want to cover your own vehicle in case of theft or damages.
Are you covered for towing?
I read over an insurance quote recently which was cheaper than others. The catch? They did not cover towing and storage in the event of an accident. For me that’s a deal-breaker. I want to be insured for all expenses. Towing and storage is super expensive and you need to decide if you are willing to take on that risk in return for a cheaper premium.
What is insurance excess?
Your insurance excess is the amount of cash that you will need to pay when you make a claim. This plays a big role in determining your insurance premium.
If you are not willing to pay in any amount when claiming, you will have a high monthly premium. If however you are willing to pay some excess, the premium will be lowered.
Why you may ask? Well, the insurance company knows that you will not make unnecessary claims and that you will be more considerate about your insurance. Well, that’s the theory. Also, it obviously costs them less per claim.
Your insurance excess is entirely up to you to decide. Just understand that the lower you make it, the higher the premium will be.
When choosing your excess amount you will need to consider how much you will be able to afford at any random time when something happens. A R7,000 excess will make your premiums so much more affordable, but wow, do you have R7,000 lying spare?
You don’t know what will happen and when you may need to claim. Should you select a high excess, be sure to have the money available in your emergency fund.
There are usually other extras that you can opt to have or not. When looking for how to find the best car insurance, you’ll see that it depends on what you need and what is important to you.
Consider whether you require a hire-car should your vehicle be in for repairs. It is obviously very useful, but how often would you need this benefit and could you afford to pay for it yourself?
What about roadside assistance? Generally this is built into the product but some offers may exclude this. Be sure to check what cover is offered and consider whether you need it.
Windscreen repairs are common and most insurance products will cater for this. Be sure to check the costs, excess and cover that is offered.
So then, how to find the best car insurance in South Africa?
Firstly, select a few insurance quote from different companies. See what benefits are offered and consider what is vital for you and what you don’t need. This will help you short-list your quotes.
Don’t only consider the monthly premium, be sure to understand the excess that you have been quoted on. If necessary, find out what the premium would be when you change the excess.
And finally, do some research on various insurance companies. Ask friends and family about their experiences and search online to see what others say. There will always be some bad reviews – whether you’re looking at insurance companies, hotels or restaurants. Companies don’t always get it right to please their customers. But, are the majority of clients happy?
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