Car insurance – your roadside companion

The importance of insuring your car

Buying a new car, whether brand-new or pre-owned, is an exciting milestone filled with anticipation and joy. From the moment of finalising your vehicle finance to the thrill of taking it for a first drive –every part of the experience brings a renewed sense of possibility.

Insuring a vehicle is however not typically something people get excited about – it’s seen as an unnecessary expense.  The truth is, insuring your vehicle is one of the most important things that should be on your to do list – it gives you peace of mind and can save you from financial difficulties.

• Car insurance is designed to cover you for loss of, or damage to your vehicle, as well as accessories and spare parts.
• If your vehicle is financed by a bank, the finance contract will stipulate that your car must be insured under a comprehensive insurance policy with a reputable insurance company. This protects you from financial loss if your car is damaged through an accident, found to be uneconomical to repair or stolen and not recovered. 
• If you don’t have insurance and the vehicle is written off due to an accident or theft, you’ll still be responsible for repaying the loan to the bank, even though you no longer have the vehicle. This could affect your financial situation, potentially making it more challenging to qualify for another loan to buy a replacement vehicle.
• If the vehicle is damaged in an accident but not insured, you’ll still be liable for your monthly loan instalments as well as the damage repairs to the vehicle from your own pocket

Tips to make your insurance ride a smooth one

1.    Insure your vehicle for the correct purposes

Insuring a vehicle for private use might be more affordable, but insuring the vehicle for private use and using it for business purposes can have financial consequences and lead to a claim being rejected or a lower amount paid out.

2.    Stipulate the regular driver as well as alternative drivers

It’s important for the insurer to know who the regular driver of your vehicle is, as well as any alternative drivers. They need this information to verify that all drivers of the vehicle have valid driver’s licenses and to establish their age.  

Insurance policies have excess payments – this is the portion of the claim which is payable by the policyholder. Should the driver of the vehicle at the time of the incident be younger than 25 years old, insurers may charge an additional excess amount due to the risk profile of the younger drivers being higher. An additional excess amount also applies if someone has had a license for less than two years.

3.    Be honest and upfront

Don’t withhold any information from your insurer. Be honest about previous accidents, as this has an impact on your cover.

4.    Maintain your vehicle and keep it road worthy

Keep up to date with services and maintenance including keeping your tyres in a roadworthy condition and ensure you have a record of these to show your insurer if required.

5.    Drive responsibly

Any reckless behaviour, (especially driving under the influence) that leads to an accident could lead to your claim being rejected. Obey the law and rules of the road.

6.    Keep your promises

For example, if you stated that the vehicle is kept in a locked garage at night – don’t park it outside

7.    Ensure your premiums are up to date

If your premiums are not paid by the due date, your policy may lapse, meaning that it is effectively cancelled.

8.    Ask your insurer about car hire

Your insurer might give you the option to rent a vehicle if yours is in for repairs or, if you’re waiting for a replacement. ,Ask them how much more your monthly premium will be if you include car hire. This is a great benefit because it can alleviate the inconvenience of not having a car and losing your independence.

Do you still need insurance if your vehicle is fully paid off? 

It’s always a good idea to insure your most valuable assets such as your vehicle.

When your vehicle is paid off, you can contact your insurer and ask them to review your insurance cover and reduce it to either Total Loss Cover or third  party insurance only.

With Total Loss Cover, you will only receive a payout if the vehicle is written off in an accident or stolen and not recovered. With third party insurance the cover only extends to the other party involved in the incident with you and will not cover your own repairs or losses.

Absa currently has two options when it comes to vehicle insurance, namely iDirect and Activate.

iDirect: comprehensive vehicle insurance with discounts of up to 30%. You can choose your own excess to meet your specific needs.

Activate: offers a fully digitalised insurance experience. You get a free telematics device, which rewards you based on your driving behaviour. The Activate App allows you to actively track your claim – keeping you informed on the claim process.

Extra insurance benefits

There are other important insurance benefits offered by Absa which offer additional protection for your vehicle, these are  called Value Added Products.

Mechanical Warranty:  this covers mechanical breakdown of your vehicle. Typically, motor comprehensive insurance provides cover for damages to the exterior or body of the vehicle, whereas, mechanical breakdown warranty provides cover for all the components found under the bonnet. It can also include additional benefit such as towing.

  Extended Cover: when you purchase a motor vehicle, the market value (or value to replace your vehicle) is different from the finance amount provided by the bank for you to buy the vehicle. This benefit provides cover for the difference between the amount owed to the bank and the market value to replace the vehicle in an event of a total loss or theft of the vehicle. Extended Cover has other benefits such as deposit protector, excess cover, car hire and more.

• Tyre & Rim: covers damage to tyres and rims for unlimited kilometres, if there are no pre-existing damages prior to inception of the policy.
• Scratch & Dent cover: repair of minor dents and scratches on your vehicle.

Your car takes you places – stay safe and covered with Absa car insurance.