Background Information to Car
& Vehicle Insurance
Motor
vehicle insurance has been described as a necessary evil – even if you pay cash
for a motor vehicle and you are the most cautious of motorists, you are at
great financial risk if you drive an uninsured vehicle.
Having
a good insurance policy puts your mind at ease as you drive and this in itself
is one of the biggest vehicle insurance benefits – peace of mind that should
you be in an accident or have your car stolen, you are covered!
Motor
vehicle insurance has become an
important business and people are getting more curious about how to safe guard
their cars and other vehicles against vehicle accidents, damage and
theft.
Basics of Vehicle & Car
Insurance
Motor
vehicle insurance is essentially a contract in which an insurance company
assumes financial responsibility for any loss the insured may incur through
damage or theft to his/her vehicle. The bottom line is that you must read your
policy and the schedule and make sure that you clearly understand the
terminology, terms and conditions, and any exclusion clauses.
Golden
rules of car insurance are:
- Know
the promise you’re buying: When you buy car
insurance you buy a promise. For years or even decades you may pay
your insurer to say: “In certain circumstances that may never arrive, I
will give you certain things.” You need to be sure of what these
circumstance are and what you will gain from the cover.
- Keep
the promise you are making: When you buy your insurance you give your
insurer much personal information such as your habits and the ways you
will use the items you are insuring. If the information is wrong,
sometimes even a little bit wrong, the insurer’s promise won’t hold up.
- It
is the insurer’s job to pay you what you are due and not more.
Why do I need Car/ Vehicle
Insurance?
The
South African vehicle hijackings and road crash statistics provide more than
enough evidence to the importance of vehicle insurance. Over the last couple of
years the cost of repairs has increased dramatically and there has been a
significant increase in the average cost of a claim. An increase in vehicle
theft, accidents and rising repair costs force insurance companies to
recalculate the risk and cost of insuring our vehicles.
If
you are an uninsured driver, you alone are responsible for covering the costs
of repairing your car or even buying a new one if it is seriously damaged. You
will also bear the legal costs of trying to claim damages from another
uninsured driver without the assistance of an insurer.
I need Car Insurance - what do
I need to know?
The
Ombudsman for Short-Term Insurance in his annual report emphasized the need to
educate the public on insurance matters. The Ombudsman for Short-term Insurance
in South Africa recovered a record amount of R83.9 million from insurance
companies on behalf of complainants in 2007.
A
staggering 67 percent of the complaints received in 2007 related to motor
vehicles. A large number of complaints arose from a lack of understanding of
insurance or a failure to understand the significance of the information given
to an insurer when applying for insurance.
There
are many insurance companies out there and it can be quite tough deciding which
to opt for. Before getting vehicle insurance, it is necessary for you to
get a detailed view of different insurance quotes from more than one insurance
company. The car insurance quotes may be different for different companies, so
it is your responsibility to carefully look into the insurance quotes and then
decide which one is suitable for you and your vehicle.
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