Ensure you’re insured

2010-09-04 11:41

A number of new cars hit our streets each month, according to car sales ­figures. Some of these cars may not be insured.

Of the new owners, the ones who buy brand-new cars are likely to be insured because finance institutions do not fund purchases if a car is not ­insured.

Some used car buyers, though, may not be insured.

First-time buyers are usually overwhelmed by the excitement of owning their first set of wheels, while others are intimidated by the complex contract terms.

If the number of complaints ­received by Hotline are anything to go by, the fine print on these ­contracts are tricky.

The South African Insurance ­Association (SAIA) said many consumers expected the conduct of ­insurance companies, including brokers and agents, to be 100% above board, but this was not ­always the case.

SAIA warned that there were some unsavoury practices that ­consumers needed to be aware of. These included being made to buy unnecessary policy frills that do not benefit the consumer, but add to the premium, and being made to keep old vehicles insured at the ­value of a new car.

Buying a car for the first time is undoubtedly exhilarating, but not reading the terms and conditions of the insurance contract can be very costly.

Brian Martin, the Ombudsman for Short-Term Insurance, said many consumers do not familiarise themselves with the terms and conditions of their ­policies.

“Consumers should make ­enquiries and ask questions.

“They must not wait until they have to claim to find out what is contained in their policies,” said Martin.

Gari Dombo, the managing ­director of Alexander Forbes ­Insurance, said consumers needed to know that most insurers would not pay a claim if the car was ­damaged while the driver was doing something ­illegal, such as driving above the ­legal alcohol limit. Consumers should be aware of this. Martin advised consumers to check their bank statements each month to ensure that the premium had been deducted as this would limit rejection of future claims.

Insurance companies are not obliged to inform a client that a ­premium has not been deducted.

Dombo said consumers could still negotiate favourable terms to ­minimise the insurance cost.

“Every year, you should speak to your insurer about how best to save on your premium without losing essential cover on your vehicle,” he advised.

  • For car ­insurance-related queries, ­contact the ombudsman on 0860 726 890 or the SAIA on 011 726 5381

Ten things you need to know about insurance - from Alexander Forbes

  • Driving under the influence of alcohol or drugs. Insurers do not pay out if you were driving over the legal blood alcohol limit or have tested positive for drugs.

  • Suspended or cancelled ­licence. Your insurer won’t pay if it finds out that you did not have a valid driver’s ­licence at the time of the accident.

  • Allowing a friend to drive your ­vehicle. If you allow other people to drive your car without informing your ­insurer, you may end up footing the bill for an accident.

  • Failing to report an incident to the police within 24 hours. Most insurance policies clearly state that you have to inform the police within 24 hours if you have been involved in an accident or if your car has been stolen.

  • Not taking your car for an ­inspection. With certain insurers, if you are insuring a new or used car, or have decided to change insurance companies, you may need to take your car in for an inspection.

  • Not installing security ­devices. Some insurers will not pay out if you have not installed security ­devices such as an alarm, an immobiliser or a tracking and recovery system.

  • Car modifications. You need to ­inform your insurer if you modify your car to change its performance. Insurers will not pay if you don’t inform them when you install new accessories such as a sound system or mag wheels.

  • Driving across borders. There is no cover when you drive out of the country, but you can have your cover extended.

  • Using a vehicle for business purposes. It is best to find out from your insurer whether the vehicle is ­appropriately covered for its regular use, be it ­business or private.

  • Relocating and changing parking areas. If you move to a new flat or buy a new house, it is important that your insurer knows about your new ­parking arrangements.

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