Companies offer South African motorists three main types of motor insurance – comprehensive, third party fire and theft, and third party only. Each of these accommodates different needs and you should be able to revise the different inclusions and exclusions, before you settle on one that is right for you.
Comprehensive car insurance is the ideal type of cover for a new or very expensive car. It offers complete protection for your vehicle against theft, or damage occurring from a natural disaster or in the case of an accident.
Also known as limited liability cover, fire, theft and third party insurance will cover your car against fire, theft and hijacking (usually). In the event of an accident, this insurance will only cover the damages, or costs incurred, to the third party vehicle, not yours. It’s a good option if your car is mostly paid off.
Third party insurance will only cover the accidental damage you may cause to another vehicle, or any costs incurred to the third party as a result thereof, involved in the accident. It should only be considered if you don’t drive your car very often, or if you’re on a really tight budget.
You may also have heard of the term, ‘excess’. Excess is just the uninsured part of your insurance claim. And it’s an amount that you’re liable for. Why? It’s there to deter you from submitting minor claims or from claiming too frequently.
Here’s a scenario to help clear things up:
Your vehicle is comprehensively insured. You are stationary at a stop street, waiting for your turn to cross over when another vehicle rear-ends you.
The accident isn’t your fault. But you still need your car, so you need to get it fixed.
Well, in the event of a claim, you’ll need to pay the excess to trigger the payout from your insurer. So you won’t be able to get it repaired until you’ve paid the excess. And, even though it wasn’t your fault, you’re still liable to pay the excess.
If the excess on your car is R3 000, and the damages amount to R50 000, your insurer will pay out the remaining R47 000, but only once you’ve paid your excess amount to the repairer.
Hopefully, this brief overview has given you a better understanding of legal cover available for your vehicle.
Article credit: http://www.womenonwheels.co.za/tip/clearing-things-up-when-it-comes-to-car-insurance/