Clueless About Car Insurance? Your Questions Answered
If you own your own car you probably know a little about car insurance. But is that “little” actually enough? When it comes to renewing a policy or shopping for car insurance for the first time, are you confused about which car insurance to buy? For everyone that has questions about car insurance, here are the answers.
Why are there Differences in Types of Car Insurance?
Look at a range of car insurance quotes, for example from Santam, and you will see that insurance is described using a number of different terms – Comprehensive, Third Party, Fire & Theft, and Third Party (only) cover. Why do all these different types of insurance exist and what exactly is the difference between them? As the name suggests, Comprehensive Car Insurance offers the most complete and widest cover. For example, this cover protects in the event of accidents, theft, and damage caused by weather events and fire. Comprehensive cover also includes cover for liability to other parties (called third parties in insurance terms) in the event of an accident. Third Party, Fire and Theft cover provides the same cover as Comprehensive insurance but doesn’t include cover for damages occurring to your car when you have an accident. The premiums are lower for this cover. Third Party Only does not cover damage from accidents or from theft and natural disasters – this cover only includes cover for the damage you cause to other people’s property. You need to choose, when you are shopping for car insurance, which option you want and need.
What is Third Party Liability?
For example, third party liability would be when you cause damage to another person’s car or vehicle because the accident was your fault. The other motorist claims against you on your insurance and you are then compensated through your insurance policy up to the value of the policy.
Do I Need to Have my Vehicle Inspected?
You will normally need to have your vehicle inspected prior to insurance being granted, unless your vehicle is new and is registered as new from a dealer. The inspection is to establish the exact condition of the vehicle. This information will be used to inform the insurers in order to calculate the insurance premiums. In most cases you will take your car to a recognized inspection centre for an analysis of pre-existing damage and an assessment of the condition of items such as the tyres and the windscreen as well as the accessories and any attached equipment. Often you can carry out an inspection yourself and submit the details using a form.
Do I Need to Pay a Higher Premium if I am a Younger Driver?
You may notice that younger drivers are required to pay higher premiums – the amount you pay each month for your insurance – but you may not be sure why. The reasoning behind this fact is that younger drivers are statistically more likely to be involved in auto accidents. The risk decreases with age and your insurance premiums go down the older you get. However, other factors may cause the premium to stay the same or go up each year so you shouldn’t expect to get a cheaper policy every year you are with the insurer.
Image courtesy of tiverylucky / FreeDigitalPhotos.net