[July 2015]: Swimming through the word soup of your vehicle insurance policy can be really frustrating. Let’s face it, it’s not exactly riveting stuff having to trawl through the jargon and definitions of what exactly you are covered for, and more importantly, what you are not covered for.  Ideally, you really want to know and understand this detail before claims time.

With so many different options on the market, there are important aspects that you need to consider that will affect the type of cover you should take out. In fact, you may even want to do the insurance research before you buy a vehicle, as this may affect your choice of vehicle in the end when one looks at things like affordability, required security measures and crime stats.  This is why when it comes to shopping for insurance, there’s really no beating the help and guidance of a professional insurance broker to protect your best interests, point out all the important aspects of your cover and what the general market trends are, making sure you don’t get any unwelcome surprises come claims time. 

“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.  With all this to consider, it can be a minefield trying to navigate the terms of your motor insurance agreement without the insights of an experienced eye,” explains Mandy Barrett of insurance brokerage and risk advisors, Aon South Africa

Aon points out a few interesting South African vehicle insurance facts:

• 70% of all motor insurance claims are accident-related.
• 55% of all accident claims have no third party involved, comprising of incidents such as a gate closing on a car or a driver reversing into their spouse’s car in the driveway, or the unseen ditch in the parking lot.
• The average claim value on a motor insurance policy ranges from R15 000 to R17 000.
• Conservative industry estimates are that only 40% of vehicles on the road are insured, creating a real dilemma if you are involved in an accident where the other party has no insurance - another very good reason to have a professional broker on your side to protect your interests.

From an insurance perspective, it is crucial to take the following matters into consideration when you are in the process ofpurchasing a vehicle:

• Do your homework on the make and model of your vehicle and find out if the parts are readily available.
• Be aware of vehicles that are considered to be higher risk for theft and hijackings.
• Obtain different insurance quotes on different vehicle makes that you are considering, to give you an idea of the risk involved.
• 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.
• Remember to check whether there is anything that you need to add into your standard motor vehicle insurance agreement such as scratch and dent cover, tyre cover, hail damage cover and so on – don’t assume that you are covered for everything.
• Consider the length of your car hire cover, in the event of a vehicle repair taking longer than the standard one month car rental allowance – ask your broker what your options would be.
• 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, a GPS navigator and additional lights.  These all add additional value to the vehicle and need to be accounted for in your sum insured.
• Credit shortfall cover – ensure you are covered for the finance charges in terms of your finance agreement.  This is the difference between the value of your vehicle and the outstanding finance settlement at your bank.

What to do if you are in an accident:

“Never accept liability in an accident – it is the job of the insurance assessors to work out who is responsible.  Your insurer and broker will handle all third party dealings in order to recover your excess and reinstate your no-claim bonus if the accident was not your fault, and you don’t want to compromise this process by accepting liability that is not yours,” explains Mandy.

At the scene of the accident, make a note of the following information straight away. 

It is often much harder to obtain the information after the fact, making it crucial to be thorough in your efforts.

• Firstly, make sure you are safe from other passing traffic.
• Take down the registration and licence disc number.
• Details of the make, model and colour of the car.
• Ask for the driver’s licence and/or ID book and take down the details.
• Get the other driver’s insurance details.
• If there are any witnesses, obtain their names and contact information.
• Take photos, where possible of the damage and scene, as well as important documents such as the licence disk, driver’s licence and so on – cell phones with built in cameras are very handy in such a situation, but also make hand written notes, just in case.
• Write out a detailed recount of how the accident happened before you forget any details – include things like lighting, weather, road conditions and so on.
• Make sure you report the incident to the police within 24 hours and get a case number – this is essential for both parties to do.

What if the other party is not insured?

In the event of a third party not being insured, your insurer will honour your claim. “If you have insurance, but get into an accident with someone who doesn’t, different scenarios apply depending on your insurer.   You are most likely going to have to pay the excess for any repairs to your vehicle, and your premium could also increase as a result of the claim due to the loss of your no claims bonus. Make sure you discuss these finer details with your broker so you know exactly what would happen in such a situation,” urges Mandy. 

Why should I use an insurance approved panel beater?

Insurers go through stringent processes to vet their service providers to ensure that their products and services adhere to an acceptable standard and that everything is above board.  “It is in your best interest to work with insurer approved suppliers so that you know you have the back-up of a guarantee and recourse in the event that the repairs are not up to standard,” explains Mandy.

If your vehicle is a much older model, you may find that it’s is no longer economical for insurers to repair and they may want to scrap the vehicle. “This may not be the best financial outcome for you,” says Mandy.  “In certain circumstance, your broker may be able to negotiate on your behalf with the insurer to repair the vehicle using legitimate reconditioned or second hand parts that are still in perfectly good condition.  This may make the vehicle more economical to repair relative to its market value.”

The services of a professional broker could well prove to be invaluable in evaluating your motor insurance policy.  “A professional broker will be able to facilitate the making of a well-managed insurance programme that accounts for your unique needs and risk profile, while matching your available budget.  Your broker will also be able to confirm exactly what you are covered for and whether any exclusions or special conditions exist on your policy.  A broker can ensure that you are in good hands and that there are no surprises waiting for you come claims time,” concludes Mandy.