All you need to know about car insurance
January 22, 2019
When you buy a new car you’re going to have to take out car insurance. That’s regardless of whether it’s brand new out of the factory or an affordable pre-owned car. Even though in South Africa it’s not a legal requirement to insure your car, you really should do it anyway. Especially with our high accident rates that happen every single day in a sheer matter of seconds. Here follows everything you need to know about car insurance.
So, let’s chat about car insurance. Let’s make sure you have the low-down on everything involved in taking out an insurance policy for your car.
Everything you need to know – Types of car insurance
First let’s look at the types of car insurance are out there and on the market for vehicle owners.
- Third party liability insurance: In the case where you cause an accident and are liable for compensating damage costs to another party, this type of insurance will cover the costs for you.
- Third party liability, theft and fire insurance: This type of insurance will cover you for the same as the above-mentioned insurance, with added cover against theft or fire damage.
- Comprehensive insurance: This will cover repairs regardless of which driver is at fault and, generally, also includes roadside assistance.
Everything you need to know – Coverage options
Now you know what the types of insurance are. So let’s we can look into the different coverage options that you should consider when buying an insurance policy plan. Make sure you know exactly what your car insurance type will include.
- Liability: When you have caused the accident, liability coverage will pay the person you hit. It won’t, however, cover the costs for any damage to the people in your vehicle.
- Bodily injury liability (BIL): In the case where people are injured in an accident which you caused, BIL will cover their medical expenses.
- Property damage liability: This coverage option will pay the person whose car you hit in an accident to cover any damage you may have done to their vehicle.
- Personal injury protection: Should you and your passengers be in an accident and incur any injuries, this coverage option will pay for your medical expenses.
- Uninsured motorist cover: In the event that you get into an accident with someone who doesn’t have insurance or has limited insurance, your insurance company will help cover damage costs.
- Collision: This is for covering any costs to repair damage to your vehicle after an accident.
- Gap insurance: Not everyone takes out gap insurance on their vehicle insurance policies as it’s not always deemed necessary. The idea of gap insurance is that it will “pay the gap between what the car is worth and what you owe.”
Everything you need to know – How much coverage do you need
How much coverage you need will be up to you, but be careful not to simply take the bare minimum as a means of feeling covered while not really losing too much money every month. The same goes for the opposite: don’t take out every single insurance coverage option just to play it safe and then struggle financially every month unnecessarily.
To work out how much coverage you need, think about the following aspects:
- Driving frequency
- Financing situation of the vehicle
- Areas you drive in
- Driving for personal, business or both
- Passengers on board
Everything you need to know – What will affect your insurance rate
Things that will affect your insurance rate include:
- Credit history: Naturally, because you will be paying them monthly installments for your insurance premiums, the insurance company will want to know what your credit history is like before they will consider insuring you.
- Insurance claim history: This will give the insurer insight on how often and how much money you have already claimed as a vehicle owner. This may lead them to charge you a higher rate as you would be a higher-risk client.
- Accident/ticket history: For the same reason above, this will show them the type of driver you are and whether you’re considered high-risk or not.
- Your vehicle: Your vehicle’s model, size, safety rating and likelihood of theft will all have an effect on your insurance rate.
- Driving activity: Depending on how often you drive, where you drive, when you drive and how far you drive, your insurance rate will vary.
All of the above factors are risk factors. The more high-risk you present, the higher your rates will be.
Everything you need to know – Why you need car insurance
The reality is, however, that you do need car insurance. Just as life and health insurance play a huge role in your peace of mind and financial stability, car insurance will do the same for you. It’s not difficult to find car insurance, just look around and make sure you’ve compared quotes. And if you’re looking for a quick and easy car and car insurance deal, InspectaCar is able to hook you up with the best in pre-owned vehicles, offer financing options and provide insurance.
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All info was correct at time of publishing