February 12, 2021
As South African motorists, we sometimes hear terms such as ‘car insurance’ and ‘motor plan’ but don’t know what they mean. If you are the owner of a car, it is quite helpful to know more, seeing that these aspects can affect your pocket.
Car insurance is a contract in the form of a policy between yourself and a car insurance company that will help you out in the event of an accident. In return for the cover provided by the insurance company, you need to pay the monthly amounts or ‘premiums’. Car insurance can be further broken down into various products provided by the insurer. The most expensive cover available is comprehensive car insurance.
This type of car insurance provides the most cover for your car. Insurers differ on precisely what they cover. PMD offers comprehensive car insurance, where the excess decreases to zero and the premiums never increase * (*Ts and Cs apply). Their product includes write-off and accident cover, cover for natural fires, disasters, theft and hijacking. The full retail value of your car is covered with PMD. PMD’s comprehensive cover also provides third-party liability insurance covering damage incurred to a third party’s vehicle. Also, this policy offers 24-hour roadside assistance, as well as hail damage and glass cover.
A motor plan usually covers three aspects – a service plan, a maintenance plan and an extended warranty. Each one is discussed in more detail below.
You may be surprised to discover that many car owners are not aware of what their service and maintenance plans entail. It will help motorists enormously if they have read the fine print before they claim. . Not many would like to discover that the service plan did not cover the cost of replacing brake pads after their car service. According to iol.co.za 3, it is advisable for motorists to investigate the various options available, depending on their affordability.
A service plan includes the everyday operation of a car. It covers all scheduled services, and the replacement of essential items such as air filters, fuel filter, an oil filter, lubricants, and spark plugs. Cambelts are sometimes included too. Service plans usually last for 3 years, or a specified mileage, whichever one happens first. However, this plan does not cover the replacement of a failing clutch, which would fall under the maintenance plan.
A maintenance plan includes the service plan as well as the replacement of parts due to wear-and-tear. Such parts may cover V-belts, wiper blades, brake pads, the clutch, exhaust system, shock absorbers, and light bulbs.
A warranty only needs to be extended once the manufacturer’s warranty has expired. The extended warranty is an insurance product that covers some mechanical or electrical failure. Examples of this could be engine and gearbox failure. It does not cover those areas included in the service and maintenance plans. In some cases this needs to be purchased while the vehicle is still in the original warranty period, for example, the extended warranty for Toyota must be purchased during the 3-year manufacturer’s warranty.
Car insurance is complex, and as a result, this article must only be considered as information. Should you wish to purchase any car insurance product, please contact a certified, financial advisor for professional advice.
To get more information about affordable car insurance in South Africa, contact PMD for car insurance that includes unique benefits such as premiums that never increase*. T’s and C’s apply.