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Cape Town - While there are many factors that determine how much you pay for motor insurance, consumers also have misconceptions and fallacies about how a premium is calculated and what they are actually covered for.
This is according to Christelle Fourie, MD of MUA Insurance Acceptances.
Consider the case of Sherwin Jerrier, an engineer from Durban who is R600 000 the poorer after a judge ruled that his insurance company did not have to pay him out for a car accident.
The reason? According to a report in IOL, he failed to inform his insurer of two previous accidents, for which he decided not to lodge claims.
Lawyers said afterwards that the case of Jerrier vs Outsurance, in which Pietermaritzburg High Court Judge Piet Koen ruled recently, has consequences for everyone with car insurance.
“Every insured person must now study their policy wording very carefully and comply down to the last letter,” said a lawyer, who declined to be named.
With the cost of running a car rising exponentially along with everything else, it is becoming increasingly important for consumers to understand how premiums are calculated, and to be aware of the most common factors that have an impact on motor insurance.
Does colour choice affect your premium?
Some consumers believe that the colour of your vehicle plays a significant part in calculating insurance premium fees, with red or black cars costing the most to insure.
Fact or fiction? The truth is that most insurers care very little about your car's colour; they are far more interested in knowing if you have had any previous accidents, the number of kilometres to be driven annually and where you live.
In actual fact, the type of vehicle is more likely to impact premiums. Do check what insurance costs will amount to before you buy that new or used car as your premiums are largely based on the car make, model, body type, engine size and the age as well as your age and driving record.
Premiums can also be based, in part, on your car's’ retail value, the cost to repair it, its overall safety record, and the likelihood of theft.
Seniors score on car insurance
Yes it's true - most insurance providers offer drivers over the age of 55 the opportunity to qualify for a significant reduction in motor insurance premiums, and a reduced excess.
If you are retired or not employed full time but are under the age of 55, you may also qualify for a discount.
If someone else drives your car, will their insurance cover them in the event of an accident?
It is vital to be aware that the motor insurance policy covering the vehicle involved is considered the primary insurance. This means that the vehicle owner’s insurance company must pay for damages caused by an accident.
It is crucial that you are familiar with the terms and conditions of your policy when allowing another person to drive your car, as the policy schedule may have specific driver limitations in respect of age and nominated and/or regular drivers.
Personal insurance won't cover you for business use
If you are self-employed and use your car for business purposes, it is vital to understand that personal motor insurance is unlikely to offer you full protection in the event of a claim.
You must situpulate the exact use of the vehicle upfront when you take out insurance cover. If other people, for example employees, also use your car, you as owner must make absolutely sure that they have good driving records.
Every motor vehicle owner should have personal accident insurance
Amendments to the Road Accident Fund (RAF) legislation, which came into effect in August 2008, now restrict injured parties to claim only against the RAF.
They limit the claim for loss and support to R160 000 per year, irrespective of actual income loss, and subject to a quarterly inflation adjustment.
A claim for general damages is limited to “serious” injuries as described in the regulations of the amended act.
However, most importantly, the common law right of injured parties to claim against the driver has been removed.
When it comes to the right to claim for more than the restricted cover provided by the RAF, the responsibility to look for other avenues to obtain adequate personal accident, disability, health and life insurance cover now lies with the consumer.
This is according to Christelle Fourie, MD of MUA Insurance Acceptances.
Consider the case of Sherwin Jerrier, an engineer from Durban who is R600 000 the poorer after a judge ruled that his insurance company did not have to pay him out for a car accident.
The reason? According to a report in IOL, he failed to inform his insurer of two previous accidents, for which he decided not to lodge claims.
Lawyers said afterwards that the case of Jerrier vs Outsurance, in which Pietermaritzburg High Court Judge Piet Koen ruled recently, has consequences for everyone with car insurance.
“Every insured person must now study their policy wording very carefully and comply down to the last letter,” said a lawyer, who declined to be named.
With the cost of running a car rising exponentially along with everything else, it is becoming increasingly important for consumers to understand how premiums are calculated, and to be aware of the most common factors that have an impact on motor insurance.
Does colour choice affect your premium?
Some consumers believe that the colour of your vehicle plays a significant part in calculating insurance premium fees, with red or black cars costing the most to insure.
Fact or fiction? The truth is that most insurers care very little about your car's colour; they are far more interested in knowing if you have had any previous accidents, the number of kilometres to be driven annually and where you live.
In actual fact, the type of vehicle is more likely to impact premiums. Do check what insurance costs will amount to before you buy that new or used car as your premiums are largely based on the car make, model, body type, engine size and the age as well as your age and driving record.
Premiums can also be based, in part, on your car's’ retail value, the cost to repair it, its overall safety record, and the likelihood of theft.
Seniors score on car insurance
Yes it's true - most insurance providers offer drivers over the age of 55 the opportunity to qualify for a significant reduction in motor insurance premiums, and a reduced excess.
If you are retired or not employed full time but are under the age of 55, you may also qualify for a discount.
If someone else drives your car, will their insurance cover them in the event of an accident?
It is vital to be aware that the motor insurance policy covering the vehicle involved is considered the primary insurance. This means that the vehicle owner’s insurance company must pay for damages caused by an accident.
It is crucial that you are familiar with the terms and conditions of your policy when allowing another person to drive your car, as the policy schedule may have specific driver limitations in respect of age and nominated and/or regular drivers.
Personal insurance won't cover you for business use
If you are self-employed and use your car for business purposes, it is vital to understand that personal motor insurance is unlikely to offer you full protection in the event of a claim.
You must situpulate the exact use of the vehicle upfront when you take out insurance cover. If other people, for example employees, also use your car, you as owner must make absolutely sure that they have good driving records.
Every motor vehicle owner should have personal accident insurance
Amendments to the Road Accident Fund (RAF) legislation, which came into effect in August 2008, now restrict injured parties to claim only against the RAF.
They limit the claim for loss and support to R160 000 per year, irrespective of actual income loss, and subject to a quarterly inflation adjustment.
A claim for general damages is limited to “serious” injuries as described in the regulations of the amended act.
However, most importantly, the common law right of injured parties to claim against the driver has been removed.
When it comes to the right to claim for more than the restricted cover provided by the RAF, the responsibility to look for other avenues to obtain adequate personal accident, disability, health and life insurance cover now lies with the consumer.
