There are some things we wish we’d been taught in school. How to do taxes. What forms to fill in for that all-important home loan. And what to expect from car insurance.
With so many insurance companies throwing around big words and seemingly important terminology ‒ not to mention those pesky Ts & Cs – buying comprehensive insurance can be confusing. What am I covered for? What am I not covered for?
The word ‘comprehensive’ implies we’re covered for everything ‒ accidents, theft, storms ‒ but not all comprehensive car insurance policies are created equal and it’s important to check that you’re getting the cover that you want.
Here are 7 points to help you with that:
1. Get a simple flat excess
You can expect to pay a part of the cost for almost all car insurance claims. This is called the excess or deductible. So make sure you choose an excess that you’ll be able to cover without needing to run off to the bank for a loan.
Also check the fine print for any additional excesses you might have to pay. It’s best to have a simple, flat excess ‒ you don’t want any surprises popping up when something bad happens.
2. Make sure both write-offs and smaller accidents are covered
Whether it’s a head-on collision or a bumper bashing, you want to know that you’ll be fully covered. Comprehensive cover should provide cover for write-offs as well as the smaller bumps and bruises your car may get.
So, when signing up for comprehensive insurance, look out for any indication that your level of cover for smaller damage depends on how long you’ve had the policy. Agreeing to this will put you at major risk if you have an accident early on in your policy.
3. Make sure hail damage is included
Hail storms are a reality in South Africa and can do serious, golf-ball-sized damage to your car, so make sure that hail cover is included in the comprehensive cover you’re looking at.
4. Check the insured value of your car
If your car is stolen or written off, you need to know what value your comprehensive insurance will pay out. The amount your car is insured for could vary depending on your insurer. Some offer retail value, while others would pay market or trade value.
Retail value is the cost to buy your car at a dealership ‒ meaning that if your car were written off, you would be able to replace it with a similar one. Market value and trade value, however, are lower than retail, which would mean that if your car is written off, you might not have enough money to buy something equivalent.
5. Get enough third-party liability cover
If you’re involved in an accident where someone else’s car or house is damaged, you could be sued to repay that damage. Third-party liability is there to cover that cost ‒ just make sure you have enough cover. If you drive into an expensive car, like a R5-million Ferrari, you would not have enough cover if your insurer only offers liability protection up to R1-million.
6. Check that other people can drive your car
Most policies these days will still pay your claim if someone else was driving the car with your permission. Just make sure you confirm that this is the case. Also look out for additional excesses that could be charged if another driver is behind the wheel when an accident happens.
7. Understand exactly what you will pay in addition to your premium
Make sure that you know what you will be paying on a monthly basis for your cover. In some cases there could be unexpected additional add-ons like:
- Initiation fees: a once-off amount charged by some insurers that covers the initial cost of setting up your account and sending you the paperwork.
- Monthly admin or intermediary fee: small amounts charged every month, paid either to the insurer or to a third-party administrator.
- Fees for services like vehicle inspection or fitment of vehicle tracking devices.
Getting comprehensive car cover should be simple. At Naked, transparency is the name of the game ‒ we’ve made sure you don’t have to worry about any of these things as they’ve been built into our product from the get-go. But if anything is unclear, pop us a question at help@naked.insure.