Now that you have found a car perfectly suited for you, making sure that your car is insured is the next necessary evil. Facts About Car Insurance You Should Know
No matter how experienced or careful a driver you may be, or that you have bought a cheaper car cash, driving an uninsured car will put you at a high financial risk.
What is car insurance?
Motor vehicle insurance is basically a contract you enter in with an insurance company. The insurance company will accept financial responsibility in the event of theft or damage to the insured vehicle and the other vehicle.
With insurance, you are essentially buying a promise. You pay the insurer a monthly fee that has been quoted to you based on your personal information. However, if the insurance company pays back the market value of your car, it will most likely not be enough or you to buy the same car again.
Why do you need car insurance?
Here in South Africa where theft, hijackings, and road accidents are high, having the safeguard of insurance is extremely important. In recent years, the high cost of vehicle repairs has significantly increased as well as an increase in the cost of the average claim. The South African Insurance Association (SAIA) states that 65% of motorists drive uninsured cars. The implications of not being insured don’t just affect you but other road users as well.
Because of all these risk factors, insurance companies have needed to recalculate the cost of insuring vehicles.
Should you be in an accident and you are uninsured, you a solely responsible for covering the cost of repairing your car. If you try to claim damages from another uninsured driver, you will bear the legal costs of that too.
What Factors determine your premium value?
There are a few factors that define what your car premium will be. The insurance provider will pay out a specific amount based on an assortment of values and information that you gave them.
• The brand and model of your car.
• The age and condition of the car.
• What the replacement value of the car may be.
• The market value of the car is what the insurer will most likely pay back to you.
• The market value is the average amount of the retail and trade value of the vehicle.
• The trade value is the price a second hand dealer will offer you.
• The retail value is the price you pay for the car when buy the new or second hand.
How to Find the Best Car Insurance.
The problem with many South African drivers is that most of them do not have any motor vehicle insurance. While the premiums are quite high and that may seem to be a valid reason for car owners being unable to pay them, it should not be an excuse to not have car insurance.
Having no car insurance is a risk too high to take. Luckily there are many reputable insurance providers that will be willing to assist you in finding the best insurance to suit your lifestyle.