There are common questions that auto insurance coverage prospects usually ask insurers, and whereas protection varies from insurer to insurer, understanding the solutions to those questions might enhance their buyer expertise – particularly when making claims.

The goal of this text is to reply a few of these Steadily Requested Questions (FAQs) that insurers usually obtain from prospects and the general public.

Why is your premium growing regardless that the worth of your automobile is reducing yearly?

The worth of a automobile declines over time, which signifies that it’s price lower than it was a 12 months in the past for 2 causes: the automobile is growing old, its future service life is getting shorter and the mileage is growing from 12 months to 12 months. A automobile with a better mileage is price lower than the identical automobile with a decrease mileage. Why do not automobile insurance coverage premiums go down yearly when the automobile is price lower than it was a 12 months in the past?

The pinnacle of MiWay Blink, Christiaan Steyn, says: “The premiums are likely to rise over time with inflation. The worth of your automobile is just related in case your automobile is stolen or written off and some of these harm solely make up about 15% of all insurance coverage prices. Due to this fact, the worth of your automobile has a comparatively small affect in your premium. Roughly 75% of insurance coverage prices are spent on restore prices (elements, paint, and labor), and restore prices are growing 12 months on 12 months. Changing the bumper on a 12 months outdated automobile prices a minimum of a model new one. The identical restore on the identical automobile will price extra within the years to come back, though the worth of the automobile shall be much less. The result’s that the rise in restore prices outweighs the lower in worth. “

Is it vital to tell your insurer if the common driver of the automobile modifications and if that’s the case, why?

That is vital as a result of insurers view the common driver, also referred to as the “regular driver”, of an insured automobile as the one that drives it probably the most in a given month, and that is logically the individual whose danger profile the protection is predicated on.

The insurance coverage protection provided and the premium for this insurance coverage protection are primarily based on the chance profile of the one that will drive the automobile most frequently. The logic then is that if another person drives your automobile greater than you do, then the premium needs to be primarily based on their profile.

Giving out deceptive details about who the common driver is is likely one of the most typical the explanation why claims are denied within the occasion of an accident. You will need to replace the insurer when the common driver of an insured automobile modifications.

Does the automobile insurance coverage cowl private damage within the occasion of an accident?

In South Africa, automobile insurance coverage doesn’t cowl private damage within the occasion of an accident, solely loss or harm to the insured automobile and associated features resembling towing and repairs.

Nevertheless, there’s the Street Accident Fund (RAF), a state-approved insurance coverage for highway customers in South Africa that covers private damage within the occasion of an accident. Because the RAF is financed by gas taxes, anybody who’s injured on South Africa’s roads by a fault of a 3rd celebration can file claims with the RAF. In response to the Taurus RAF Barometer, which displays the developments of the RAF within the fee of receivables, “the present common fee interval was within the 2nd”

Simply as highway customers are insured towards private damage with the RAF, those that insure their automobile towards monetary loss even have protection choices. In brief, the choices out there to auto insurance coverage prospects range from insurer to insurer, however there are non-negotiable or fundamental features of protection that don’t embrace protection for private damage within the occasion of an accident. For instance, most auto insurances supply pothole harm protection as a foundation, however auto insurances will be personalized to swimsuit the policyholder. The choices out there to prospects are usually the next:

  • ‘Whole loss’ usually solely covers prospects for the whole lack of their automobiles resulting from depreciation, theft or kidnapping, and restricted legal responsibility.
  • Insurance coverage cowl “Just for third events” normally provides legal responsibility cowl for all harm that the insured automobile might trigger to the property of one other individual, ie a 3rd celebration.
  • “Third Celebration, Hearth and Theft Safety” supplies safety towards automobile theft, fireplace harm, and harm that the driving force might have brought on to another person’s automobile in an accident.
  • “Complete” insurance coverage protection provides probably the most complete insurance coverage protection and provides insurance coverage towards theft and kidnapping, harm brought on by accident, fireplace or explosion and pure disasters.

How does an insurer resolve what your automobile is price if it is stolen or written off?

It will depend on the worth for which your automobile is insured. You normally have three choices, specifically retail worth, market worth, and commerce worth. Within the occasion of a write-off or theft, the worth on the time of loss or harm is used to find out the insured worth, not the brand new worth when the contract was concluded.

  • The retail worth is the typical present gross sales value (on a seller’s ground)
  • Industrial worth is the typical value a automobile seller pays you for the automobile
  • Market worth is the typical between retail worth and commerce worth

As proven above, these are all averages primarily based on transactions with comparable fashions at retailers throughout the nation. Your automobile might have a listing of extras or be in a lot better situation than the typical automobile of the identical age. Within the final step, automobile extras (if specified and insured) in addition to the mileage and the situation of the automobile are taken under consideration with a purpose to decide a good worth in your particular automobile.

It will be significant that prospects perceive the phrases of the contract earlier than agreeing to them with a purpose to get the very best buyer expertise. When you have any questions on your possibility, contact your insurer.

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