Without the financial experience of what insurance is all about, it’s likely to be challenging trying to unravel why the insurance quotes you receive vary so radically in premium price, the terms of cover, the excess or deductible you’ll need to pay in event of a claim, and most importantly, what is and isn’t covered
Lions Risk provide invaluable tips that will help you when assessing your motor insurance:
Do the insurance research before you buy a vehicle
This may affect your choice of vehicle in the end when one looks at things like affordability, service costs, parts availability, required security measures and crime stats. There are so many aspects that affect your motor insurance, ranging from the make and model of the vehicle, through to the cost of parts and availability, whether you need car hire in the event of an accident, what the vehicle is utilised for, your driver profile and age and even your credit rating. Be aware of the type of security precautions you will need, such as a tracking device as you need to factor the ongoing subscription cost into your monthly expenses. With all this to consider, it can be a minefield trying to navigate the terms and conditions of your motor insurance policy without the insights of an experienced eye.
Insure your new vehicle for its list price
It is essential to check the terms and conditions of your vehicle cover. If you are purchasing a new vehicle, you can insure it for the new list price of that vehicle for the first 12 months. Thereafter it is recommended to insure your vehicle for its retail value, which is the price the dealer will sell a second-hand vehicle to you. Market value is the average of the difference in price between retail value and its trade-in value, in other words what you could expect to receive from a dealer, were you to trade the vehicle in, which is why insuring your vehicle for its retail value is preferable.
Third party liability
Besides the obvious cover for accident damage and theft, your motor insurance also provides you with third party liability cover which is embedded in your policy. Third party liability is like having an umbrella on a cloudy day. You might not need it, but in a sudden heavy downpour, you’ll be grateful you have it. This cover protects you against a third party suing you in your personal capacity for financial loss, physical injury or death in the event of an accident.
Don’t assume you are covered for everything
Certain events are not always automatically covered on a standard motor vehicle insurance agreement, such as scratch and dent cover, tyre cover, hail damage cover as a few examples. You may need to purchase these covers at an additional premium. Finding out that hail cover was excluded on your policy after your car has been damaged by hail, can hurt your pocket, financially.
Likewise, remember to specify any add-ons to your vehicle that are not standard features on the vehicle such as alloy mag wheels or a specific sound system, nudge bars and side steps and additional lights. These all add additional value to the vehicle and need to be accounted for in your sum insured. If they are not specified, they won’t be covered.