With the summer holiday season only two months away, many people are starting to plan their vacations – which usually involves a lengthy vehicle trip along heavily clogged roads. While you’re busy making accommodation bookings and deciding what to pack, it’s also vital to check that you have appropriate vehicle insurance.
A lot of things might have changed since you first signed up for cover, and you may not realise that your insurance could be due for a tune-up. A timely review can address any oversights.
“When reviewing insurance, it’s good to search for competitive rates, but you need to consider all aspects of what the different companies offer, and not just give an insurer the green light based on price alone,” says Sarah Nicholson, Commercial Manager of Justmoney.
“Factors that can affect the cost of car cover include the exchange rate, cost of repairs, driver’s age and driving history, the area where you live, and the insurance period,” says Nicholson.
If, like many South Africans, you are stretched financially and might be tempted to put the brakes on insurance, remember that you could then end up in an even worse financial situation if your car is damaged or stolen.
“Even if you are the most careful driver, you are at great financial risk if you drive an uninsured or under-insured vehicle,” says Nicholson.
If you have borrowed money from a bank or finance company to buy your vehicle, legally it’s theirs until you’ve settled the debt. What’s more, in most cases, if you cancel or default on the insurance, you’re in breach of the finance contract.
This means that if the car is damaged, written off or stolen, you’re still personally liable for the outstanding amount. This could place you in a precarious situation where you still owe a large sum on a car which you can’t drive, or no longer have – and still need a car to get to work and earn a living.
“Take care to familiarise yourself with the policy terms so that you know what is covered, and understand the compensation limits. The bottom line is that correct insurance is vital for your peace of mind and safety, and is not something you should cut corners on.”
Also be aware that there are a number of reasons why an insurance company may refuse to pay out a claim. For example, if there is reckless driving, if you are insured for personal use and use the car for business purposes, claim late, or don’t comply with the security arrangements, you could find yourself on a road to nowhere.
“It is vital therefore that the cover is appropriate for your current situation and that you understand the terms and conditions,” says Nicholson.
If you are struggling with the monthly payments there are more sensible ways to save motoring money than cancelling or defaulting on your insurance. Some tips include:
- Drive smartly: A smoother driving style will save you money. Try to avoid stop-start rush hour motoring which burns fuel and increases wear-and-tear. Take advantage of flexible work hours if you have them.
- Service regularly: Sticking to the service intervals ensures that your guarantee remains valid if your car is still under warranty. It also helps avoid huge, costly repairs.
- Reduce drag: Remove roof racks when they aren’t in use, which will boost your fuel economy.
- Tune tyres: Follow the manufacturer’s specifications and keep the pressure correct.
- Commute: Minimise travel costs by setting up a car pool with some colleagues.