MOTOR
INSURANCE
Essentially
covers your motor vehicle against collision, fire
and theft.
Factors
that could influence premium:
Where does the vehicle live: The premium on a vehicle
that is kept in a locked garage in a security complex
will be lower than when the vehicle is left out
in a busy street at night.
Residential area: If you live in a high risk area
your premium will be higher than in a low risk area.
Based on statistics, some areas are a higher risk
for e.g. theft and/or hijacking of vehicles.
Who normally drives the vehicle: Younger drivers
tend to be involved in more accidents than older
drivers; female drivers are less likely to be involved
in an accident than male drivers, etc.
What is the vehicle used for/circumstances: You
pay less if the vehicle is mainly used for private
purposes vs. business purposes; you pay more if
the private purposes are for a student going out
each night to party with his friends vs. Mom taking
the kids to ballet classes.
Security measures: Your insurer will stipulate
the minimum security measures required for your
vehicle based on the type of vehicle and area you
live in. If your security exceeds the minimum requirements,
you can get a discount on your insurance quote.
Insurance companies generally only give discount
for immobilisers, gearlocks and tracking devices.
Type of cover: Comprehensive cover is the most
expensive, then third party, fire and theft (covers
fire and theft, as well as damage you might do to
somebody elses property) and lastly plain third
party (covers only damage to another persons property;
fire and theft are not covered).
Extras: If you have non-standard extras on your
car like air-conditioning, sunroof, mag wheels,
car radio/cd shuttle, leather seats etc, you will
pay an additional premium for these extras.
Voluntary excess: With most insurance companies
you can reduce your monthly premium if you are willing
to pay an additional amount to the basic excess
of the policy when you submit a claim. A higher
voluntary excess will result in a lower insurance
premium.
Three
values:
Retail value : the price that a car dealer might
sell the vehicle for
Trade value : what the dealer might buy the vehicle
for
Market value : halfway between trade and retail
values
Some
insurance contracts are based on market value, which
pay out ± 4% to 5% less than what it will
cost you to buy the equivalent car from a dealer.
If
you want maximum payout on a write-off, some insurers
offer retail value contracts. However, expect to
pay around 5% higher premiums.
Be
careful not to make the following mistake:
You
buy a new car for R200 000, insure it for R200 000
and your car insurance drifts out of mind. Some
years later your car is stolen. Its value is R50
000. You will only receive R50 000 from your insurance.
Over the years, however, you may have given your
insurer R5 000 or more in excess premium.
It
is YOUR responsibility to keep your premium down
by regularly alerting the insurer to reduce the
sum insured as the value of your vehicle depreciates.
HOUSEHOLD
CONTENTS INSURANCE
Covers
everything IN your home
Be
careful not to make the following mistakes:
In the security clause of your policy you specify
what kinds of burglar protection you have installed
i.e. burglar bars, security gates, alarms, etc.
Over time, however, wear and tear or misuse may
result in these protection devices not working as
it should. Assessors see at a glance that the alarm
is not working or alterations have disabled the
security door specified. If specified protections
were not in operation, you are not covered.
Make
sure that your protection is working as it should,
or inform your insurer if the specified protection
is not in force anymore (knowing that this means
a raised premium).
Nobody likes counting household items piece by piece,
room by room, rand by rand, but this time spent
say about 2 hours a year might save you thousands.
You
set up house and insure the contents for R100 000.
Over time you purchase new items and furniture.
Your latest purchase is a bedroom suite of R50 000.
Due to a fire the suite is destroyed. You think
you have no worries, since your household contents
are insured for R100 000 and you are only claiming
for R50 000.
Wrong.
The assessor visits, sees all the new purchases
youve made over the years, and he gauges the value
of the household contents at R500 000. But R500
000 goods are insured for R100 000 of loss, which
means each R1 of goods is insured for 20c of loss.
The result: you get only R10 000 compensation for
your R50 000 suite (R50 000 x 20c).
Make
sure that YOU keep the value of your household contents
up to date.
Factors
that could influence premium:
Residential area: If you live in a high risk area
your premium will be higher than in a low risk area.
Roof and wall construction: If your house has
a non-standard roof (e.g. thatched roof) or wall,
there is a higher risk than a standard residence
and your premium will be rated accordingly.
Security measures: Your insurer will stipulate
the minimum security measures required for your
residence based on the area you live in. If your
security exceeds the minimum requirements, you can
get a discount on your insurance quote.
Generally house contents are covered against fire,
theft, water, wind and storm damage. If you exclude
e.g. burglary and theft cover, the rate of your
insurance quote could be reduced.
Claim-free years: First-time insurers will pay
more for insurance cover than somebody with a good
insurance history. A discount is calculated in accordance
with the years that you have been insured without
claiming.
Voluntary excess: With most insurance companies
you can reduce your monthly premium if you are willing
to pay an additional amount to the basic excess
of the policy when you submit a claim. A higher
voluntary excess will result in a lower insurance
premium.
HOME
OWNERS INSURANCE
Home
Owners insurance is bricks and mortar and roof and
fittings thus the improvement to the real estate.
Most policies exclude maintenance and its consequences:
If your roof collapses during a storm, and the assessor
finds that the roof beams were termited to danger
point, there will be no pay-out. Cover depends on
adequate maintenance.
Most policies insure for rebuilding value and
not market value.
Market value is affected by location, crime rate,
etc.
Rebuilding value is what it costs to rebuild what
was damaged, to the same standards, the same way,
in the same place.
It is YOUR responsibility to keep the value of
your property up to date.
Your insurer may adjust the value of your property
annually, but he does not necessarily adjust it
enough. If the whole house is insured for R1000
000 but the rebuilding value is R200 000, you are
only paid half of any claim.
Some people think that since the bank valued the
property, it should be adequate. Wrong. The bank
only take into consideration that if you fail on
your bond they have security. They may recommend
a replacement value, but the insurer may not accept
it, especially if the maintenance or construction
is dodgy.
It
is YOUR responsibility to keep the value of your
property up to date.
PERSONAL
LIABILITY INSURANCE
This
insurance covers damage to persons or property of
non-members of your household.
Some
of it may be covered in Home Owners, Household Contents
and/or in Motor insurance. Check these first before
you buy Personal Liability to make sure where you
are covered and where you are at risk.
Example:
If your dog bites a visitor in your garden, you
may be covered, but if your dog bites the visitor
in the street, maybe not. Take your lifestyle into
account: does the dog get out of the gate? Is it
a pitbull or a poodle?
ALL
RISKS INSURANCE
This
insurance applies to moveable property i.e. handbags,
cell phones, watches, laptops, jackets, bicycles,
etc.
Your
loss is covered anywhere. However, make sure that
all items are specified.
Ascertain
what the limit for low-value items are that dont
have to be specified. Then make sure you specify
all items with a higher value than the limit: make,
shape, colour, serial number, everything that defines
each item. If it is above the limit and not specified,
it is not covered.
PERSONAL
ACCIDENT INSURANCE
This
insurance covers you against disablement caused
by an accident and provides for your loved ones
in the event of your death.
It
is worth being very picky with personal accident
cover. You will find big differences between different
policies.
HINTS WHEN CONSIDERING AN INSURANCE COMPANY
/ GETTING A QUOTE:
Get al least three quotes
Do research to establish if there are any hidden
costs
What excesses are payable?
Are there any additional excesses payable in certain
circumstances?
What is the companys reputation for service ,
price and claim settlement turnaround times?
Is the company registered with FSB as a financial
service provider?
Do they offer a money back for claim-free period?
How long is the claim-free period?
Is there an option available to choose higher
excess to reduce premium?
Do they cover your car at retail or market value?
When a car is stolen, is there a waiting period
for vehicle claim to be settled?
Are any brokers fees payable\included in premium?
Can you choose your own service provider (e.g.
panel beater) or do they dictate who the service
provider must be?
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