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What car insurance is right for you?

What car insurance is right for you

What car insurance is right for you

There are many car insurance products out there and it can become a bit overwhelming deciphering what they all mean, which can make it hard for you to decide whether it’s something you should consider getting or not. So then, what car insurance is right for you?

Ask yourself this: If your car is stolen or written off, can you replace it in cash? Or if you had to bump into a fancy new Merc or BMW, and the owner of that car held you responsible for the damages to their car, would you want to spend the rest of your life paying that off? If you’re leaning towards “No”, then take a look below. I’ve briefly unpacked what car insurance is out there, and what the best option for you might be.

The most basic and cheapest form of car insurance is third-party liability cover

Fun fact: In most countries around the world, third-party liability cover is a legal requirement if you want to drive, but not in South Africa.

Third-party liability cover aims to protect you from being held liable for damages to another person’s property. ‘Third-party’ refers to the person who holds you responsible for damage caused to their property by your car.

In practice, what often happens is that the owner of the car you damaged will put in a claim with their insurer, who will then take legal action against you to recover the damages you caused. Third-party liability cover will protect you in scenarios like this in that your insurer will take care of everything on your behalf.

Think of it as protection for everything that your car might damage while you are driving it, except for the car itself. And the best thing is that it only costs around R60 or R70 a month – that’s only two or three cappuccinos, if you think about it.

Comprehensive cover

Comprehensive cover is (you guessed it!) the most comprehensive car insurance you can get and is required if you’re buying a car through the bank.

Comprehensive car insurance covers you for loss or damage to your vehicle caused by hijacking, theft, Mother Nature, fire, lightning, explosions, and malicious or accidental damage. It will also cover you if you damage someone else’s property and they sue you for the damages.

Why does the bank make it mandatory that you have comprehensive insurance?

If your car is written off or stolen and there is still an outstanding balance on your loan, it often means that you will have to pay off the loan while possibly paying for a new one. In this instance, it can sometimes be impossible to pay off both debts, which in turn can see you in debt indefinitely and unlikely to be lent any money in the future. Comprehensive car insurance will cover you in cases like this.

But that’s not all! Many insurers offer added extras and benefits with comprehensive cover. A few of the most popular benefits include:

Here are a couple of the most common extras you can personalise your cover with:

What to do when it comes to claiming

An insurance claim is when you make a formal request to your insurer to cover the damages after something bad has happened to your car or after you have damaged someone else’s property with your car.

Your insurer will need proof of the accident/loss

In order for your insurer to pay for the damages, they will need proof of the accident. Your premiums will also have to be up to date.

What happens if the accident wasn’t your fault?

  1. You can claim directly from your insurer and they will approach the insurer of the person responsible (if they have insurance).
  2. You can choose to claim directly from the insurer of the person at fault.
  3. If the person at fault doesn’t have insurance, you can approach them directly and ask them to pay for the damages themselves.
  4. If the damage costs less than your excess, you can try to recover the damage from the responsible person via the Small Claims Court. (Note: Claims have to be smaller than R20,000 in order for you to go this route.)

The four most common reasons for a claim to be rejected

A couple of tips to help you choose the best insurance for you

Obviously, the most ideal situation is to have as much cover as possible. But realistically, you should take your personal situation into consideration – decide how much cover you can actually afford and what to prioritise. For every person, in every financial situation, priorities are different, but going without the core insurance could be more costly in the long run!

Get an instant & final car insurance quote from the company that I use myself.

P.S. If you’re looking for more information, Naked has covered all there is to know in this piece on car insurance.

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