Why Reducing Car Insurance Is a Bad Idea

    July 3, 2018

    While reducing car insurance cover may ease your financial strain it is not always the best solution, explains Gari Dombo, Managing Director, Alexander Forbes Insurance.

    For example, perhaps you are thinking about reducing car insurance to third party fire and theft. But that means you will still pay for any damage to your car if you are in an accident with an uninsured driver.

    Imagine reducing car insurance and then having a serious bumper-bashing with an expensive Bentley. You would be liable for the costs of repairing the Bentley.

    The Danger Of Reducing Car Insurance – Over 65% of Vehicles in South Africa are Uninsured 

    Reducing car insuranceNow there’s a good reasons to forget about reducing your car insurance.

    “It really doesn’t matter how cautious a driver you are. A total of 65% of the vehicles on our roads uninsured. So if you do have an accident, there is a 2 in 3 chance that this will be with an uninsured driver and that you, or your insurer, will be paying for damage,” adds Dombo. This alone is a good reason for not reducing car insurance.

    Stay Calm If You Are in a Car Accident and Take Notes

    If you are involved in an accident with any driver, make sure you note the driver’s name and address as well as the vehicle make, model and registration number.

    Also, record as much detail as you can about the accident scene. Whether traffic lights were working or whether the other car was speeding, had lights on, had indicators on etc.

    All these details are important as the other driver, insured or not, will use every opportunity to put the blame on you so that your insurance will pay out.  It is also a good idea to, if possible, identify an independent witness and get their contact details as this may strengthen your case.

    You can see that car accidents can have complications. Don’t complicate it more by reducing car insurance. Get car insurance quotes to find cheaper cover, but don’t cancel your existing cover until you have.

    Compulsory Third Party Insurance is Needed to Combat Selfish Unisured Motorists

    According to Dombo, the motor insurance industry is currently collaborating on how best to facilitate compulsory third party damage cover. This will minimise the desirability of reducing car insurance.

    If there was compulsory universal cover everyone who suffered damage in an accident would be able to recover their losses says Dombo. Reducing car insurance to try and save costs would be unnecessary.

    Furthermore, compulsory universal cover may result in lower premiums for currently insured clients as risk is taken up by the previously uninsured, effectively reducing car insurance.

    Certainly the current situation means that conscientious drivers who insure their vehicles have to pay for irresponsible motorists. And that is extremely unfair. “Not only does this cause untold damage but is also, to my mind, one of the most pressing consumer abuse issues in South Africa,” concludes Dombo. The insurance industry also carries the burden of these selfish motorists.

    Reducing Car Insurance is a Terrible Idea

    The bottom line is that reducing car insurance is a lousy idea. In fact, it should be compulsory for car owners to have at least some cover.

    Before reducing car insurance take advice from a broker or get an alternative quote. Reducing car insurance might not be necessary – you might just decrease your premiums.


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    All info was correct at time of publishing