Why you cannot be without car insurance

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A few things to consider about car insurance

cannot be without car insurance

With just over 11 million registered vehicles in South Africa, it is alarmingly to note that approximately 60-70% of these are uninsured.  Now, if that doesn’t worry you, let’s do some maths and see what that actually means in real life terms.

By Vuyi Mpofu 

Take into consideration that there are more than 800 000 crashes on our roads annually.  Add the fact that around 520 000 of the vehicles involved in these crashes are uninsured, then the burning question we should all ask is – what does that mean for me?

The answer, quite simply is that without car insurance you are playing Russian roulette with the end result being that the proverbial bullet will eventually find you. You are basically gambling.

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Granted, car insurance is a grudge purchase.  It’s something people simply do not want to fork out their hard earned cash for, particularly in these hard times.  Many motorists would rather gamble on not being involved in an accident than include insurance premiums in to their monthly budget.  However, having car insurance is a necessity.  When you finish reading this I hope you will see that it is not just a matter of choice.

So, driving without insurance is not worth the money you think you save by not paying your monthly insurance premiums.  Allow me to paint the grim picture of what I mean by this:

Driving on our roads is a dicey business.  At any given time, someone could:

  • skip a red traffic light and crash into you,
  • skid out of control on an oil patch on the road,
  • have mechanical failure such as brakes not engaging.
  • A pedestrian could step out onto the road in front of your car,
  • you could cause an accident by trying to avoid a pothole,
  • a taxi could come to a dead stop in your lane,
  • the driver in the lane next to you could change lanes without checking their side mirror,
  • you could become embroiled in a road rage incident resulting in an altercation and damage to your person and vehicle.

The examples are too numerous to mention; and yet these are the risks you face every single day.

With that in mind, being involved in an accident which results in damage to your vehicle or your person would leave you facing the financial consequences of that incident; and, if that accident were to involve other people and another vehicle, you could find yourself accountable for those costs in addition to your own.

You could end up in a legal battle with the other party’s insurance company which could in the long run result in your assets being brought into play as a way to cover the amount owed for repairs, all while being without a vehicle and having to beg family, colleagues and strangers for transport or even having to use public transport.

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In the event of an accident without insurance, your car could end up being towed and stored by the towing company at an exorbitant cost to yourself.  You might take the route of repairing the vehicle yourself at the dodgy repair workshop not far from your home resulting in your vehicle immediately losing value as it would have been unattended to by an unauthorized repairer.

Of course, there is the other 30- 40% who do have motor vehicle insurance and whilst that is commendable, the truth of the matter is that there would be a high number of those motorists opting for the lowest available premiums, largely because they do not enjoy the benefit of understanding the pros and cons of the cover they have.

Don’t get me wrong, I am not bashing those with low-cost premiums because after all, you could be doing as much as you can to ensure you stretch your budget to include basic insurance.  My point is that it is absolutely CRITICAL that you know what your insurance policy entails.  You do not want to end up in a situation whereby you have been making monthly payments towards your insurance payments only to discover that it does not cover certain elements needed to repair your vehicle.  That would definitely leave a sour taste in anyone’s mouth.

Basic things to ensure you understand include what the excess fee would be in the event you had to make a claim.  To be clear, the excess is the amount you pay towards an insurance claim for loss or damage to your car, irrespective of what the circumstances of the loss or damage might be.   All too often, an insurer offering lower than average monthly premiums will hit you with a substantial excess bill should you need to claim.

Other vital areas of understanding include:

  • What the policy actually covers. Do not be afraid or shy to ask for a list of parts and body panels which your premium covers in the event of your car being at the repair shop.
  • Is this comprehensive insurance cover?
  • What is the turnaround time for claims?
  • Are there any penalties incurred to claiming within a set period e.g., the first six or 12 months?
  • What exactly are those penalties?
  • Would you be charged any other costs or additional excess fees should you make a claim and what would those be?
  • Are you covered if other people drive your car? E.g. your 18-year-old daughter or your 45-year-old husband
  • Is your car covered for resale or full retail value?
  • Does the cover include car hire in the event something happens to your car, e.g., when your car is in for repairs?

I cannot overstress the importance of having car insurance nor the need to understand what it covers so that you minimise the chances of your fainting when faced with the costs of repairing your car.

As a starting point, I strongly suggest you read your policy today and engage your insurer should there be anything you do not understand.  The lingo used in some insurance contracts can be tricky if not downright ambiguous!  You have the right to accurate information so do not be afraid to query until you are satisfied about what exactly you are paying for on a monthly basis.

And if anybody gives you flack for being persistent, tell them I sent you!

*Some of the information contained in this article is courtesy of regular AA press briefings.