How to pick the right car insurance policy?


Car Insurance. Love it or hate it, it is more necessary than evil. It's for all the things that could ruin our lives and drastically alter our financial status.  So, although it is painful to keep having those debits every month, just remember that insurance is about covering a loss, well a potential loss.

As you can see insurance is a valuable financial resource when you have the right cover at the right levels, but it can be a waste of money if you do not get it right.

So whether you are buying car insurance for the first time or shopping around for the best possible renewal price, understanding the basics of purchasing car insurance is the key to getting the right coverage at the right price.

Here is a guide for you to use to you find a good insurer for your car. 

There are a variety of options drivers can select to create a comprehensive policy that meets all of their needs. In South Africa we have three types of vehicle insurance available and choosing the right option is easier when you know how they work.

Third party only cover is the cheapest option available. It provides cover for damage you might cause to someone else’s vehicle. It also includes cover in the event of accidental injury or death of third parties.  On the flip side, it doesn't cover damage to your own car; that remains your personal expense.

Third party, fire and theft insurance includes third party cover plus cover you if your vehicle is stolen, hijacked or damaged by fire. Remember you are not covered for damage to your own vehicle.

Comprehensive car insurance is the most expensive but also the most extensive. By paying more, you will be covered for events such as theft, hijacking, fire, hail, floods and loss or damage caused by collisions. Comprehensive cover includes third party cover.

Here are some of the things you should consider when finding the right mix of coverage options for you.

Can you afford it? 
  • Your budget will obviously play a large part in the coverage you take out. 
What type of car do you own? 
  • Consider the age and condition of your car.
Do you have a long commute or take frequent road trips?
  • Among other things, extra miles mean more wear-and-tear on your car, and greater need for roadside assistance in the event of a breakdown. And if you are driving for a number of hours every day, you are more likely to be involved in an accident than someone that drives only occasionally.  
Are you the only driver of your vehicle?
  • Consider who uses your car, how often and in what way. If you have other drivers, choose coverage options and services that take their needs into account.
If you suffered an injury in an accident, would you have medical coverage through an employer or other means to pay for those expenses?
  • If not, medical payments coverage is much more important.
The next thing is to compare car insurance carriers because companies and rates vary widely. As a general rule, it's wise to get insurance quotes and information from at least three separate companies. Keep in mind that you'll be dealing with your insurer in the event of an accident or emergency, so be sure to select a company that is committed to customer service. Do your homework ahead of time by comparing ratings and researching complaints to ensure a company handles claims -- and answers questions -- honestly and promptly.

I can tell you from experience that choosing an insurance provider involves an overwhelming amount of information. Still, it is important to be fully informed about the type of cover that is best for you, or you could find yourself out of pocket in the event of a claim.

After you find out the quotes you can compare which ones will suit your needs.

During these challenging economic times, it may be tempting to go with the cheapest option available but remember cheaper isn't always better; and paying a little extra could be worth it in the long run. The difficult reality is when it comes to a comprehensive insurance cover plan, if you cannot afford all of it you probably need it and if you can afford it you probably do not. Just make sure you do your homework to find a balanced policy -- one that covers you adequately in the event of an accident but one that doesn't make you pay for coverage you don't need.

And if you want to save, you can always ask the insurer about other car insurance discounts. For example, when you take out King Price's comprehensive car insurance, your premium will decrease every month and when you insure 2+ cars with them, they discount your car premiums which still decrease monthly. And you can also insure some of your favourite things for just R1 every month.

And consider Add-Ons. Although add-ons increase your premiums, they are worth considering to make sure that you are adequately protected in the event of a car accident. These include road side assistance, car hire reimbursement, windscreen replacement, dent & scratch protection.

While these ideas are not exhaustive, they are a good start in helping you find the right car insurance for you.  The most important thing for you to do is check the benefits of a policy carefully before committing to buy. Make sure you’re not pressured into paying for anything you don’t need, but that you get a level of cover you’re happy with.

Source: AA