Why cover is vital

2009-09-01 12:20

Path: /Published/CityPress/2009/08/30/CP/Texts/jgInsurance.xml Creator: system Last Modified by: system Print Chanal: CityPress Edition: CP Publication Date: 20090830 Section: Motoring Folio: Page Ref: 34 Book: Source: MethodeMANY vehicle owners are cancelling their insurance policies ­because they can no

longer afford the premiums.
The surge in the cost of motor ­repairs is one

of the reasons why ­insurers are scrambling to implement measures to prevent

customers’ premiums from rising.
Other factors that lead to an escalation in

­insurance premiums are the costs of manufacturer-approved parts and labour,

delays caused by the growing need for imported parts and extended car-hire

­periods because repairs take longer.
Andrew Lilley, director of ­short-term

administrator CIB Insurance, said one of the measures insurers took to counter

rising costs was sourcing alternative components when repairing damaged

vehicles.
He said manufacturer-approved components were not always made by

the manufacturers themselves but outsourced to specialist component

manufacturers.
“These specialist component manufacturers also produce the

­alternative parts. These are often identical to the original factory components

in every way, save for the branding,” said Lilley.
But if a customer bought

parts that did not include a warranty would he or she be held liable for pirate

parts?
“The type of parts used in the repair of the vehicle will be taken

into consideration when assessing the damages and the subsequent cost of repairs

for any other damages as a result of an accident at a later stage.
“An

insurer will only use alternative parts where it is appropriate and the insured

is not compromised in any way in terms of their warranty on the vehicle or their

personal safety,” Lilley said.
He added that another way insurers attempted

to lessen costs was to set up a “panel” of repairers to which they referred the

majority of their work.
“The larger the volumes that they are able to direct,

the better the costing structures since the repairers are able to offer lower

rates due to the volumes that they are able to maintain,” he said.
He said

many people did not realise the consequences of failing to pay or cancelling

their policies.
“For example if they are involved in an accident with a

third party and they are to blame, they will not only be liable for the repairs

to their own vehicle but to the third party’s vehicle as well.
“If the

vehicle is stolen or written- off in an accident, not only will they be without

the use of the vehicle, but will now need to try raise finance for a new vehicle

which will undoubtedly cost more to ­replace what they had,” he added.
It is

also important to know that most insurers don’t tell their clients that they can

ask for a re-quote based on the depreciation of the ­vehicle’s value.


Instead they say the cost to repair the vehicle is the same, if not more,

which means large ­discounts are not always proportionate to the depreciation

value of the vehicle.
Managing director for M&A ­Insurance Brokers

Marlene van Molendorff said she always emphasised that clients should read their

policy documents carefully.
“There is a lot of information in those documents

and often I find clients just pay their monthly premiums without going on.


“It’s also important for clients to be well-informed of the different

­options available within theirinsurance company,” said Van ­Molendorff.
 

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.