FAQ About Car Insurance and Their Answers – Educate Yourself

    January 5, 2019

    Frequently Asked Questions About Car Insurance

    There are many frequently asked questions about car insurance. What follows is a list of the most frequently asked questions about car insurance that we’ve come across that you might not know the answer to either.

    What is the difference between comprehensive and third party car insurance?

    Comprehensive insurance covers vehicles for damages sustained in road accidents, loss or damage caused by fire, theft, natural disasters such as hail damage and liability for third party claims.

    Third Party Insurance is two-fold. Basic policies cover vehicle owners against third party claims when liable for damages or injuries sustained in a road accident.

    Third Party Fire and Theft Insurance covers the above, as well as theft and damages or loss caused by fire.

    frequently asked questions about car insurance

    Is it necessary to have vehicles inspected before applying for car insurance?

    Unless purchasing a new vehicle, buyers of used cars should have them inspected before applying for insurance.

    This can be done at approved vehicle inspection sites, or online by downloading and completing an inspection form.

    Retails, Trade and Market values – what is the difference?

    Retail Value is the selling price that the car dealerships estimate of the vehicle. If insured at Retail Value, owners would be able to replace the vehicle with something similar in the event of hijacking, theft or write-offs.

    Trade Value is the price estimated at which owners would receive if selling their vehicles directly to a dealer, this is known as the Trade Value.

    Market Value: This is the average valuation of the vehicle between its Retail and Trade Values. Market Value insurance offers lower premiums, but settlements for theft and write-offs will probably be insufficient to replace the vehicle with something similar.

    Which is best – Domestic or Business insurance?

    Owners who use their vehicles primarily for travelling to and from work, attending conferences and meetings, should apply for business insurance.

    Domestic insurance is best if one uses the vehicle primarily for social and personal activities.

    Why do premiums increase when vehicle values depreciate?

    Insurance companies build inflation costs into premiums. Potential repair costs are likely to rise due to inflation. These costs include vehicle parts and labour so, despite depreciation on annual values of vehicles, premiums rise.

    Why do younger drivers pay higher premiums?

    Statistics have shown that younger drivers are in more road accidents than their older counterparts. They are therefore liable to pay higher premiums which do, however, reduce annually if the policy holder is claim-free.

    Must one use original parts only in vehicle repairs?

    The company repairing a vehicle should repair the vehicles under factory warranty must with original parts.

    The repairning company can use alternative parts when repairing older models, as long as it is in keeping with industry standards.

    Using non-approved parts could lead to higher premium payments.

    Why must I pay an excess when the accident was not my fault?

    Car owners must make excess payments irrespective of who was to blame for an accident. To recover costs, one must claim excess amounts directly from the guilty party.

    Is it necessary to install additional security devices?

    Some insurance companies insist on anti-theft security devices before approving applications. Their argument is the more security features the lower the risk of theft.

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    All info was correct at time of publishing