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Posts Tagged ‘car insurance policy’

Cheap Car insurance

We all want cheaper insurance. Though it is a necessity, most people tend to view their monthly premium as a grudge payment. Insurance companies across the board use the lure of cheaper premiums very effectively in marketing campaigns; in certain cases even offering to pay out an agreed sum of money should they not be able to provide you with a cheaper quote.

But what exactly is cheaper insurance? A cheap monthly premium is not the only consideration to keep in mind. An insurance policy is, in essence, a legal document, and the document in its entirety has to be reviewed thoroughly in order to ascertain the cost effectiveness of your insurance.

A starting point would be to confirm that the policy you select is fit for purpose and covers your insurable interest (for instance, if you are the only person driving your car, there is no reason to have a policy permitting more than one driver).

In addition, the following can be considered:

 

Excess

This is where most people lose with their vehicle insurance. The amount of excess you will pay in the eventuality of a claim is directly proportionate to the cost of your monthly premium. As an example (using very simplified figures):

Sandra pays a monthly premium of R100 towards comprehensively insuring her car, a late model sedan. She is covered for the full retail value of her vehicle should it be stolen. Her excess is 15% of the claim with a minimum payment of R5, 000.

Dan pays a monthly premium of R150 for the exact same vehicle. He is also covered for the full retail value of the vehicle, but his excess in such an eventuality is only 5% of the claim, minimum R2, 500.00.

Assuming that the model of car in question has a retail value of R100, 000.00, Sandra will only get a settlement of R85, 000.00, whilst Dan will get a payout of R95, 000.00.

In addition to the basic excess explained above, additional excesses should also be taken into consideration. The full description of excesses will always appear in your policy. You can use this schedule of excesses to help you determine whether your cheap car insurance is really as cheap as claimed.

 

Policy Wording and Inclusions/Exclusions

The way in which your policy is worded along with the specific inclusions, exclusions and conditions pertaining to your insured vehicle also plays a huge part in ascertaining how affordable your car insurance is.

Let’s continue with Sandra as an example and assume that she has lodged a claim for a stolen vehicle. Sandra bought her car with a factory-fitted alarm, but never installed a VESA-approved gear lock, which her policy stipulates as a security requirement. Because of this policy condition, her claim might be repudiated. This means that her “cheap insurance” potentially ended up amounting to “no insurance”.

Dan, for instance, might have installed an expensive sound system in his car, never realizing that additions such as those are excluded in his policy. He might have his claim settled for the retail amount of the vehicle minus the excess, but he will incur a loss with the sound system.

On the other hand, specific inclusions might make the insurance policy more worth-while.

 

Enticers (or Policy Sweeteners)

Policy sweeteners are terms and conditions in your policy with the specific purpose of making it more attractive.

An example of a policy sweetener might be that you will pay no excess (or greatly reduced excess) should you lodge a windscreen claim. Or that an extra driver can be added to your car insurance policy without affecting the monthly premium.

These are always worthwhile  to consider when looking at getting the cheapest car insurance.

The car insurance industry in South Africa is a large and growing sector of our business sphere. Car insurance in South Africa is always needed and is of great benefit to the client.  The process of car insurance South Africa has become that much easier and more accessible to the client as to enhance customer satisfaction and return.  Not only has the prospective client got the option of a traditional broker for car insurance in South Africa, but they can also use the internet and get online quotes for free and organise the taking out of the car insurance policy in South Africa.

The online car insurance industry in South Africa is a relatively new market; however it has taken the industry by storm, dominating the insurance process.  The prospective clients usually find the online car insurance process in South Africa that much easier and fast, making for effective and pleasant insurance attainment.

The car insurance in South Africa today usually includes insurance for both personal and business vehicles, theft or fire, damage, accidental care, accessory insurance, third party insurance, maintenance insurance, medical and legal insurance as well as insurance for specialised types of cars.  The options that are made available to the client are of the discrepancy of the car insurance company in South Africa that is used, and would be present to the client as such.  The different options would be presented to the client through the car insurance internet sites in South Africa by means of their resource companies available.
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In the insurance world, the Car insurance policy is a legally binding contract that is drawn up to state the regulations between the policyholder, also known as the client, and the insurer, or insurance company.  Insurance policies are designed differently to other contracts as there are many other features that must be included to meet particular needs in the insurance policy that are not required or included in other types of contacts.

During the insurance procedure, the premium, which is a designated amount of money according to the insurance policy, is paid in exchange for the agreement of the insurance company to pay for the stated kinds of loss and damage as per the insurance policy.  An insurance policy, and its agreements, only pertain to events that are uncertain, either when the events happen or if the events will happen in general.

An insurance policy is usually said to be a contact of adhesion, as the client does not have the ability to change the contract.  They are also aleatory, which means that the amount that is paid as the premium, and the amounts exchanged by the insurance company are unequal in nature and depend on the events that will happen in the future.  Insurance policies are considered as unilateral as well, which means that only the insurer will make legally binding and enforceable assurances in the insurance policy. This entails the commitment of the insurer to pay for the damage if the premiums have been paid and other provisions have been met, however does not entail the commitment of the insured to pay the premiums. Another characteristic of the insurance policy is that it is disclosed in the principle of good faith.  This requires both parties to deal with the insurance policy in good faith and to disclose all information and material facts that are related to the insurance policy.
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