This South African pandemic has had and is continuing to have a devastating financial impact on many households. Paying for car insurance doesn’t put food on the table, and so many policyholders may question whether buying car insurance is worth it. But as you read on, you’ll see it’s best to have some car insurance to protect you and your car.1
What does car insurance mean? 1
Car insurance is a contract between you and the insurer, who is bound by that contract to pay for any damage or loss. You also must abide by what’s written in the contract.
Why you can’t afford not to have car insurance1
To answer this, we should ask ourselves how we would cope if we crashed into a brand-new Mercedes Benz but had no cover at the time? It’s easy to be dismissive and say that those kinds of car accidents don’t happen to me. But, unfortunately, people do have accidents. The main issue to consider is a financial one.
Can you pay for an accident out of your pocket? 1
If you happen to be extremely rich and have no issue with any cash flow, then perhaps this is not for you. But most motorists would not be able to find R100 000 to pay out-of-pocket for damage done to a third party’s car. To be in such a dire situation can be life-changing, and you may take a long time to recover financially.
What about your own car? 1
If you are forced to pay privately for damage to a third party’s car, the other disadvantage is that you may not have sufficient funds to have your own car repaired. If your job depends on having a car, then lack of cover could deal with another severe blow. Paying privately for a towing service can add up over long distances.
Can you afford car insurance premiums? 1
The preceding information focuses on the realistic importance of taking out some car insurance cover. You may acknowledge it is vital to take out cover for your car, but you say you can’t afford it. Perhaps this is debatable because usually, life is all about priorities. For example, we agree that paying for car insurance does not put food on the table, but if you had to pay for an accident out of your own pocket, you might not have enough funds to buy food at all.
What about third-party car insurance? 1
This is the cheapest type of car insurance, and although it doesn’t cover your car, it does at least cover damage to the third party’s car. The monthly premium is affordable to many motorists. Instead, start out with some cover than no cover at all. If your financial situation improves, you can eventually buy comprehensive car insurance if that applies to your situation.
Disclaimer
Because car insurance is not straightforward, this article can only supply information. In the same way, you need to first get professional advice from a certified financial advisor before considering buying car insurance.
If you currently have no cover for your car, it will be best to find out more about which car insurance products are available in the market. This is where Prime South Africa can assist you by providing you with all the information you need about their affordable, comprehensive car insurance product, which has excellent unique benefits such as fixed premiums* and a reduce to zero excess*. T and Cs apply.
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