Car Insurance: How does it work?
If you own a car, you probably already know a bit about how car insurance works in South Africa. The big question is, do you know what type of car insurance is right for you?
The first thing is understanding car insurance and knowing how the different types of car insurances covers are available and how they work. These include;
– Comprehensive Car Insurance;
– Third Party and Theft Insurance;
– Third Party only Insurance.
All these have different costs attached to them and the cost of your car insurance is based on a number of factors, including what kind of car you drive, your age, your driving history and your claims history.
Comprehensive cover is the most expensive type of car insurance because it gives you the widest cover, whereas, third party, fire and theft insurance or third party only cover is cheaper, but if you damage or write-off your car in an accident you will have to cover the costs yourself.
Most people think that the older the vehicle, the lower their premium should be, but there are a number of factors, other than just your vehicle’s value, that insurers have to take into account to determine your premium. These include:
• The cost of repairs (taking inflation, import costs for parts and labour into account)
• The make and model of your vehicle, its age and condition, as well as the replacement value. Some vehicles (like 4X4s and sports cars) cost more to repair than others, while some vehicles are more at risk of being stolen or hijacked.
• Factors affecting your premium also include where you live and whether or not your car is kept in a locked garage at night. The premium may also be reduced if the vehicle is fitted with a tracking device, alarm, etc.
• Your premium also depends on what your car is used for. Cars used for business or delivery purposes generally attract a higher premium.