By H&H Admin
Car insurance is an investment that provides peace-of-mind in the event of accidental damage or loss to your vehicle; however, it can be pricey.
Car insurance gives you financial protection as well as protection for your car. Although it is more financially beneficial to have car insurance than to go without it, many South African motorists do not have car insurance citing high costs as a major factor for being uninsured.
The reality is that car insurance in South Africans is extremely high because the insurance industry is under immense pressure. This is largely due to the staggeringly high number of car accidents, car theft and hijackings. As a result insurance companies pay out billions annually to cover damages and losses to motorists and car fleet owners.
Although the cost of living in South Africa is high, it is not advisable to cancel your insurance policy in the hopes of saving money monthly. Rather, there are ways to reduce your car insurance costs if you find yourself financially stretched.
Suggestions on how to reduce your monthly insurance premium
- Upskill yourself by completing a defensive driver training course and present your certificate of competency to your insurer
- Increase your excess in order to reduce your monthly premiums
- Insure your car for its market value instead of its retail value*
* Your car insurance covers your car for three possible valuations – retail value, market value and trade value – which come at different premiums.
- Retail value cover is the most expensive and means you will be paid the current value of replacing your car
- Market value brings down your premium, but you may find that your car is insured for lower than its market value.
- Trade value is what your car would be traded in for at a dealership and is often much lower than the value of your car.
Approximately 70% of South African motorists do not have vehicle insurance. Currently, car insurance is not a legal requirement in South Africa and there are no penalties for driving uninsured. Until the South African government makes it illegal to drive without basic car insurance cover, motorists will continue to pay exorbitantly for it.
