Car Insurance Demystified

Comprehensive car insurance covers the insured against all forms of vehicle damage or loss, within the limits of the policy rules. In other words, your insurer will pay out against the loss of or damage to your own car and/or a third party’s vehicle, provided that certain standard terms and conditions relating to your policy are met. If your vehicle is still under finance, it is likely your financial institution will require that you take out comprehensive insurance on your vehicle.

Third party, fire and theft cover ensures that any damage to another person’s property or vehicle in the event of an accident for which you are deemed liable. Additionally, you are covered against the loss of your vehicle through theft or fire.

Third party insurance covers only the property or vehicle of a third party in the event of loss or damage for which you are deemed to be liable. 

EXCESS 

Excess is the amount of money you pay toward the repair or replacement of your car in the event of a claim. This amount will vary from one insurer to the next, dependent upon your risk profile and other factors, and will be set when you take out your policy. You may opt for a higher excess amount in order to pay a lower monthly premium or for a low excess amount, in which case your premium will be higher. You should discuss your options in this regard with your insurer when you take out your policy. 

POLICY EXTRAS 

Many insurers offer special deals, rewards or lower premiums to clients who opt to install telematics systems in their vehicles. Telematics systems are systems that track your vehicle’s location and the speed at which you are travelling. Some smarter systems can pick up how hard you brake and how quickly you’re turning corners, and some can even detect when there is an impact, as in the event of an accident. 

PREMIUMS 

There are a number of factors that will determine how much your monthly premium will be, including your age, the type of vehicle you’re driving, where you live and where your vehicle is usually parked overnight. In addition to these, an insurer will take into account any modifications to the vehicle, how many different drivers it is driven by on a regular basis and whether the vehicle is used primarily for business or personal travel. 

As mentioned earlier, if your excess amount is relatively high, you may pay lower monthly premiums and vice versa, and if you have an insurance-approved telematics system installed, responsible driver behaviour may positively influence your monthly insurance premiums. 

ENSURE YOU’RE INSURED 

Whatever your specific requirements may be, whether you’re a first-time car owner or an experienced driver, it is important not to overlook the importance of insurance when it comes to your car. At Nedbank, you can now receive a complete insurance quote online within minutes. You can also download the Nedbank App Suite and receive a quote directly to your smartphone.