March 28, 2023
The Automobile Association of South Africa (AA) states that, of the 11.4 million registered vehicles on South African roads, only 30-35% have car insurance. Unfortunately, unlike many other countries, third-party car insurance is not compulsory in South Africa. Nevertheless, you are encouraged to carefully examine your existing car insurance policies or obtain cover if needed. But before doing so, consider some significant considerations to ensure that your policy suits you the best.1
Determine which aspects of a policy you require for your unique situation. Then add up all the costs and see if you can afford them. For instance, would it jeopardise your job if you couldn’t use your car for a few weeks? If so, you need to include car hire in your policy to make sure you have alternative transport should you have an accident. 1
Whichever one you choose depends entirely on your financial setup. Choosing a lower premium is best for you if you can afford to pay a large sum at short notice for a higher excess. On the other hand, select a higher premium if you can only afford a low excess. 1
Even though you can compare car insurance quotes quickly on the Internet, it’s not always clear who offers what. So, approach the insurer to explain the finer details of the policy. But, if you are still unsure about the level of cover, it’s best to ask an impartial broker for their opinion. Because you’ll eventually sign off on the policy, you need to make an informed decision. 1
Avoid obtaining only one car insurance quote – preferably get at least three quotes from reputable and well-known companies. Your aim should be to find a quote that best suits your situation. Be sure to present the same information to each company so that you can compare ‘apples with apples’. Be honest about your driving history to avoid any difficulties later on. 1
What are some of the other issues that affect the cost of car insurance?
Included with the cost of an insurance package are the age of your car, its value, and any additional items. 1
Your driver profile or driving history tells the insurer whether you are a risky driver. Insurance is all about risk, and the greater the risk you pose, the higher the premium will be. Therefore, building up a defensive and acceptable driver profile over time may help you obtain a lower premium. 1
Parking in an unsecured location in a suburb experiencing high crime could affect your premium. 1
There’s a huge difference in risk between a person who drives his car a few blocks a month and a salesman who drives thousands of kilometres each month. 1
Young drivers are inexperienced and present a greater risk to the insurer than a 40-year-old professional that has been driving for 20 years. 1
Considering all these points before you sign on the dotted line will improve your chance of obtaining a low premium.
The article’s aim is to remind you of what points you should consider before purchasing car insurance. 1
If you are unhappy about your current car insurance policy or want more information, contact us at PMD, and enjoy our world-class service. We provide affordable car insurance, including comprehensive car insurance with fixed premiums* and reducing excess*. Our comprehensive car insurance and customised car insurance plans cover cars not older than 15 years, but our Third-Party PLUS car insurance covers vehicles of any age. T’s and C’s apply.
To avoid errors, consult a financial advisor for professional advice when purchasing a financial services product.