Steer clear of vehicle under-insurance this holiday season

With the summer holiday season only two months away, many people are starting to plan their vacations. This normally involves a lengthy vehicle trip along busy roads.  It is vital to check that you have appropriate vehicle insurance. Much could have changed since you first signed up for cover. You may not even realise that your insurance could be due for a tune-up.

“When reviewing insurance, it’s good to search for competitive rates, but you need to consider all aspects of what the different companies offer, and not just give an insurer the green light based on price alone,” said Sarah Nicholson, Commercial Manager of a financial company. The cost of car cover could be influenced  by the exchange rate and cost of repairs. The driver’s age and driving history, the area where you live and the insurance period should also be checked.

If, like many South Africans, you are stretched financially and might be tempted to put the brakes on insurance, remember that you could then end up in an even worse financial situation if your car is damaged or stolen. “Even if you are the most careful driver, you are at great financial risk if you drive an uninsured or under-insured vehicle.

If you have borrowed money from a bank or finance company to buy your vehicle, it is legally theirs until you’ve settled the debt. What’s more, in most cases, if you cancel or default on the insurance, you’re in breach of the finance contract. This means if the car is damaged, written off or stolen, you’re still personally liable for the outstanding amount. This could place you in a precarious situation where you still owe a large sum on a car which you can’t drive, or no longer have and need a car to get to work and earn a living.

Take care to familiarise yourself with policy terms. Understand what is covered, and the compensation limits. Sufficient insurance is vital for your peace of mind and safety. Do not cut corners on this.

Be aware that there are a number of reasons why your claim could be refused. In the case of reckless driving and if you are insured for personal use only and using the car for business purposes, the insurer would most likely not pay. Should you claim late or don’t comply with the security arrangements, you could be in a dire situation. It is vital therefore that the cover is appropriate for your current situation and that you understand the terms and conditions.

If you are struggling with monthly insurance payments, see tips below to save money:

  • Drive smartly: A smoother driving style will save you money. Try to avoid stop-start rush hour motoring which burns fuel and increases wear-and-tear. Take advantage of flexible work hours if you have them.
  • Service regularly: Sticking to  service intervals ensures that s guarantees remain valid if your car is still under warranty.
  • Reduce drag: Remove roof racks when not aren’t in use. It will lessen fuel consumption.
  • Take care of the tyres: Keep the pressure correct as per the manufacturer’s info.
  • Commute: Minimise travel costs by setting up a car pool with some colleagues.