Questions to ask before buying car insurance

South African motorists may have questions that need to be answered before buying car insurance; whether you are a first-time car owner or looking to save money on your existing car insurance policy.

Motorists need to source the information that adequately answers their questions before they need to choose the car insurance cover that suits their requirements and their monthly budgets.

Be sure about what you need and what you are happy to pay each month before you start comparing the insurance plans from various car insurance companies. How do you use your car? What risks are you exposed to daily? There are many questions that you could consider asking and get answered before you decide to buy car insurance. Let’s delve into this further.

1. How many kilometres do you drive each month on average?1

How far do you drive each month? Are there any alternatives for you to drive less? For example, do you drive your car a short distance each month because you use public transport like the Gautrain? You could consider a per-kilometre type of car insurance, which means that your monthly premium accurately matches your average monthly driving pattern and you don’t pay for cover that you may not need.

The less you drive, the lower the risk you may pose to your insurer, which could reduce your monthly car insurance premium.

2. Will you be using your car for work? 1

Be mindful that car insurance differs based off how you use your car. ‘Business’ car insurance is available if you use your car for commercial purposes, such as a taxi service. A ‘personal’ kind of car insurance will not cover your vehicle that is used as a taxi service for which you get paid to transport passengers.

3. What car do you drive? 1

Every vehicle’s insurance premiums are determined on their own merit. Car insurance companies may consider factors like theft statistics and the value of a vehicle when determining monthly premium prices.

Is your car modified? For example, a car that is ‘lowered’ may not be insurable by some car insurance companies. Do you drive a rare, old sports car? A specialised car insurance product may be required if you want to insure a highly-valuable classic vehicle.

Do you drive a high-performance car? Do related car accident statistics reveal that your car’s model is a high risk to insure? The inverse may also be a factor. Perhaps your vehicle is considered a low risk for insurers.

4. What level of cover suits you? 1

To what degree would you like to be responsible for the repairs of your car if it were to be damaged in an accident but not written off? How expensive could it be to fix your car’s minor damage yourself? Perhaps you drive a high-end vehicle which would be prohibitively expensive to fix yourself, or alternatively, your car’s parts are extremely affordable, and you don’t mind paying to have it fixed yourself? Depending on your situation, you could choose comprehensive or third-party cover.

5. Where do you park your car? 1

Where do you park your car? Where do you park it at night (where you live) and during the day (where you work)? How secure is the parking area? Some areas of South Africa could be considered more of a risk for car theft compared to other areas, which could affect your car insurance premium.

6. Do other people drive your car? 1

Do you share your car with a partner? Does your teenage child drive your car on the weekends? It is essential to ensure that all possible drivers are covered when they drive your vehicle. Your car insurance premium may be affected by the number of people who are covered to drive your car. What if you don’t declare that other people drive your vehicle? Leaving out this information could affect you when it comes to claiming from your car insurance company.

7. Is your car still being financed or leased? 1

Do you own your car, or do you still owe money on it, or are you only leasing it? Financial institutes usually have a set of car insurance-related requirements when it comes to agreeing to finance or lease a car. These requirements should be adhered to as part of your contractual obligations with the financial institution through which you are financing or leasing your car.

8. What personal factors are considered? 1

Factors such as your age could affect your car insurance premium. Younger drivers may be considered more of a risk to ensure compared to older drivers.

Disclaimer

Please remember to ask a certified financial adviser all of your questions before you decide to buy car insurance. This article is for informational purposes only.

Sources:

1. 1. 8 questions to ask before buying auto insurance