When you buy a car, you need to take out a comprehensive car insurance policy to protect your investment; especially, if you are still paying your car off. The institution that granted you a loan for the car will require you to take out a comprehensive insurance policy.
Before you make a final decision on which company to go with, which policy take out, and sign the documentation, it is important to ask what your policy covers, as well as, what it does not cover. Here are the answers to a couple of the more common questions that you need to ask your insurance broker:
- Which vehicle repair shop may I take my car to?
You have the right to take your car to any panel beater or vehicle repair company. However, most insurance companies will have reciprocal agreements with multiple panel beaters and vehicle repair shops, and they prefer you to get your vehicle repaired at one of their “approved” shops.
If you do not get your vehicle repaired by one of these shops, your insurer may reserve the right to withhold part, or all of the payment for your car repairs.
- May I have a loan car while my car is being repaired?
This will depend entirely on the agreement between you and your insurance company. Some insurance companies will offer a loan car as an “add-on” to your policy; while, others will offer it as part of your basic package.
- Do I get a new car if my car was written off in its first 2 years?
A new-for-old replacement clause is often included in a comprehensive car insurance policy. This means that in the event of your car being stolen or “written-off”, and your car is less than two years old, your insurance company will replace the car with new car, rather than paying you out for insured value of your vehicle.
It is important to note that your insurance company will replace your car with the same make, model and year of your insured vehicle, as well as replace the insured “extras” from your old car into your new car.
- How much is my excess if I want claim on my insurance policy?
In the event of an unfortunate accident, or the theft of your vehicle, and you want to claim from your insurance company, your policy stipulates an excess amount that they will not cover as part of the claim. In other words, your insurance company will not pay the stipulated amount to the repair company when you claim for damage to be repaired. You will have to pay it yourself.
As a result, you might want to consider whether it is worth claiming for small items and save the claims for the theft of the car or the expensive damage to your car.
- How does the stipulated excess affect my monthly premiums?
Most, if not all, insurance companies will allow you the option of increasing your excess per claim; thereby, reducing your monthly premium covering the policy. On the other hand, an insurance company might offer you the option to increase your monthly premium to cover the cost of your excess per claim.
By paying a higher excess, you can save on your monthly comprehensive car insurance premium. The down side of this is that if you have to claim for damage to your car, your excess might be unaffordable. The ideal is to try and balance your monthly premium amount and the excess amount you will have to pay per claim.
- Does the policy cover the contents inside my car (laptop, belongings, etc. that were lost)?
Most comprehensive car insurance policies offer a certain amount of coverage for your personal possessions left inside the vehicle when something happens to the vehicle. This might not be enough to cover the cost of the actual gear in your car.
It is, therefore, important to determine what percentage of cover your default policy has, and, if necessary, increase the cover to suit your needs. Of course, your monthly insurance premium will increase as well.
There is an English idiom: “Forewarned is forearmed”. In other words, it is important to research what different comprehensive insurance policies cover before you meet with an insurance broker. This will help you ask the right questions and work your way through the policy’s fine print; thereby, allowing you to make sure that you choose the right policy to meet your needs.