If you’ve ever been involved in a vehicle accident, you’ll know that motor insurance stands as a crucial pillar of responsible vehicle ownership, acting as a financial shield against unforeseen circumstances that could lead to significant financial losses. While we’re all familiar with what this type of insurance is, there are several specifics that many are often not aware of.
At Kayser Baird, we take great pride in being renowned as the experts in short-term insurance. We have helped thousands of our customers not only ensure they have sufficient cover in place, but that they understand what type of cover is best suited to their needs and their circumstances. The same is true of car motor insurance in South Africa, and in this article, we’ll unpack some of the key specifics that vehicle owners should be aware of.
Let’s start with the basics.
The basics of motor insurance
Motor insurance, often referred to as car insurance or auto insurance, is a financial product designed to provide coverage against physical damage, theft and liability. Vehicle insurance in South Africa is mandatory if you purchase it with a loan from a bank or another financial institution. While basic coverage is mandatory in such cases, many vehicle owners opt for comprehensive insurance, which offers broader protection.
Comprehensive motor insurance typically covers damages to your vehicle in accidents, theft, natural disasters and other unforeseen events. It often includes coverage for medical expenses, legal fees, and personal injury protection. The premium, or the amount you pay for insurance, is based on a variety of factors, such as the type of coverage, the make and model of the vehicle that you drive, your age, your driving history and where you live.
Let’s break this down a bit.
- Make and model: The make and model of your car are important factors for insurers in working out the premium. Insurance companies assess the repair and replacement costs associated with specific makes and models, considering factors like the availability of spare parts and the vehicle’s overall safety record. It goes without saying, but more expensive or high-performance vehicles mostly have higher premiums due to their higher repair or replacement costs.
- Your age: Younger drivers often face higher premiums as they are statistically more prone to accidents. On the flip side, experienced and older drivers with a clean driving history may qualify for lower premiums.
- Your location: Where you live also influences your premium. If you live in an area with a high rate of accidents, thefts, or natural disasters, the insurance company may consider your location riskier, potentially leading to a higher premium.
Understanding motor excess
A component of motor insurance that often confuses South Africans is that of your excess. Excess refers to the sum of money you commit to covering from your own pocket before your insurance coverage becomes effective in settling a claim. For example, if your claim amount is R50 000 and your excess is R2 000, your insurer will settle R48 000 and you’ll need to cover the shortfall. It’s important that your insurer gives you 100% clarity on this, as you may be caught on the back foot if you claim and your excess is higher than what you anticipated.
At Kayser Baird, we always ensure that our customers are fully aware of their excess details so that they are informed and not surprised down the line.
Types of Excesses in South Africa
In South Africa, there are different types of excesses that vehicle owners need to be aware of, each playing a specific role in shaping the terms of their insurance coverage.
- Basic/Standard Excess: This is the fixed amount you agree to pay in the event of a claim. It is determined by your insurer and is applicable to all claims unless stated otherwise in your policy.
- Voluntary Excess: Some policies allow you to choose a voluntary excess in addition to the standard excess. By opting for a higher voluntary excess, you can lower your premium, but it also means you’ll have to pay a larger sum out of pocket in the event of a claim.
- Additional Excess: Most insurance companies will charge the basic excess plus an additional excess for certain conditions, which include:
I. Your age: Specific to drivers under the age of 25
II. Your licence: Drivers that have had their licence for less than 2 years
III. Additional excess for theft and hijacking
It’s important that you have a clear understanding of what the specifics are of your excess, and it’s the job of your insurer to make this crystal clear. As our CEO Michael Baird says, “Understanding the various types of excesses is crucial for policyholders to navigate their insurance policies effectively. It empowers them to make informed decisions about their coverage, tailor their policies to their needs, and manage their financial exposure in the event of a claim.”
Navigating the complexities
Beyond the basics of motor insurance and excess, there are other facets that you should be aware of. For instance, the process of filing a claim and the importance of maintaining a clean driving record.
Filing a Claim: While you hope that you never need to, at some point you may need to file a claim. Knowing exactly how to do so will relieve some of the stress that surrounds a motor incident, whether that is an accident or theft. When an accident occurs, it’s important that you report it to your insurer straight away. At Kayser Baird, we have a dedicated claims department that will guide you through the process. When you do report the incident to your insurer, it’s important that you provide accurate and detailed information as to what happened. Also, make sure that you document the incident with photos or even witness statements if possible. If you are proactive with your claim, it helps to expedite the entire process and the settlement of your claim.
Maintaining a Clean Driving Record: A clean driving record is one of the best ways to keep your motor insurance premiums in check. Insurers reward safe driving habits with lower premiums, as a history of accidents can significantly increase the cost of coverage.
What happens if you don’t have motor insurance in place?
If you did choose the risky route of not having motor insurance in place, even though you are required to in South Africa if you’ve purchased it via loan, there are serious consequences. Without the protective cushion of insurance coverage, you expose yourself to a myriad of potential financial and legal challenges.
Financial Consequences: In the absence of motor insurance, you become personally responsible for covering all costs arising from an accident or damage to your vehicle or another involved in an accident. This includes the expenses related to repairing or replacing your vehicle, medical bills for injuries sustained and potential legal fees if you are held liable for the incident.
Limited Recourse for Damages: If you’re involved in an accident with an uninsured driver, the repercussions extend beyond your own situation. Without motor insurance, your ability to claim damages from the other party may be severely limited. This lack of recourse can leave you without compensation for medical expenses, vehicle repairs or other losses incurred during the accident
Understanding the specifics
Having a comprehensive understanding of motor insurance and its various aspects is not just a matter of compliance; it’s about safeguarding your financial well-being and protecting your investment. When you truly understand your policy and the specifics thereof, you are ensuring that you have sufficient cover in place and a policy that suits your specific circumstances.
At Kayser Baird, we take great pride in ensuring that our customers are equipped with all they need to know about their policy. We work with each customer to tailor make them a solution, one that ensures that they have the right cover in place for their needs.
If you need motor insurance, look no further than Kayser Baird. We’ll help you choose the right policy at the right price. We only underwrite through South Africa’s leading insurance companies, including Santam and Hollard, and dozens of other trusted companies.
Did you know that with Santam you receive a complimentary home-drive service in the event that you are unable to drive yourself home? Here are five additional benefits that you’ll receive by insuring with Kayser Baird:
- Road Assistance: A 24-hour contact for roadside emergency services anywhere within the borders of South Africa.
- Home Assistance: A 24-hour helpline to assist policyholders at home with the call-out of service providers such as electricians, plumbers and locksmiths.
- Route Assistance: A 24-hour limitless directions helpline, within the borders of South Africa, by telephone, fax or e-mail, for when you are lost and need directions.
- Medical Assistance: To assist with emergency telephonic medical advice, transport by ambulance to a hospital, arrange for your family to be notified of your condition and trauma counselling. This service is available at all times.
- Legal Advice: A 24-hour helpline assists with legal advice on matters such as criminal offences, fines, debts, contracts, labour law, divorce, maintenance, accidents and more. This advice is given by qualified and experienced attorneys and is offered by Legal Exchange Corporation.
Contact our team of experts today at +27 31 767 8000 to see how we can get you the right motor cover at the right price.
