The importance of insurance for South African motorists

Insurance is required in order to protect the asset and ensure that it retains its value throughout its lifespan regardless of any accidents or damage that might occur during that time.

While insurance is not mandated in South Africa, when buying a vehicle by way of any type of financing agreement, whether that be an instalment sale, GFV or leasing agreement the financing institution will mandate comprehensive insurance cover.

This insurance is required in order to protect the asset and ensure that it retains its value throughout its lifespan regardless of any accidents or damage that might occur.

For motorists paying off a vehicle through a financing arrangement this is critical because they will remain liable for the monthly payment of the vehicle as set out in the financing agreement, even when the vehicle is damaged in an accident or stolen. It is therefore imperative to have insurance cover in place for if such a loss should occur.

Maintaining your insurance cover

In addition, South African motorists need to remember that failing to maintain their vehicle could result in insurance claims being rejected, leaving them to foot the bill for the damage to their car and even any other cars involved in the accident if they were at fault, from their own pocket.

Consumers often forget that all general insurance policies carry a wear and tear and gradual deterioration exclusion as well as exclusions for mechanical and electrical breakdowns. This requires policyholders to take reasonable steps to prevent damage and keep vehicles in a safe working order. This means that failing to attend to maintenance items such as worn brakes, bald tyres, faulty suspension or broken lights could have serious consequences.

Motorists need to remember that an insurance assessor will look at whether poor maintenance contributed to an accident before approving a claim. If an accident was caused or made worse because the vehicle in question was not maintained or was in an unroadworthy condition, for example if worn brakes prevented the vehicle from stopping in time or smooth tyres caused the driver to lose control in the rain, the insurer is within their rights to reject the claim.

According to the National Financial Ombud, wear and tear, gradual deterioration, and a lack of maintenance are some of the leading reasons insurance claims are declined in

South Africa. While this is often discussed in relation to buildings and property, the same principle applies to vehicles.

In order to ensure that your vehicle is covered by insurance, in the event of an accident, motorists are advised to service their vehicles regularly and keep a record of work done, act immediately on safety-related advice from a trusted repair centre and ensure that their tyres, brakes, suspension and lights meet the required standards for the vehicle to be classified as roadworthy.

Make sure your licensing is up to date

While most insurance policies will cover your car no matter who is driving it, such as a friend or family member, insurance companies are within their rights to refuse claims if the vehicle was driven by an unlicensed driver or if the license of the driver or the vehicles license disc is expired at the time of an accident.

Stick to the rules of the road

Motorists also need to remember that having insurance does not give them the ability to drive however they want to and be covered in the event of an accident. Insurers have every right to refuse claims should it be found that the driver was deliberately breaking the law by way of driving recklessly, speeding or driving under the influence of alcohol.

Be honest with your insurer

Your insurance and monthly insurance premiums are based on a variety of factors such as your accident history, who the regular driver is, if the vehicle is used for business or leisure, where you live and where the vehicle is parked during the day and at night. It is important to be truthful with your insurance when answering these questions and to communicate any changes in the way the vehicle is used to your insurer. If your insurer finds that the vehicle was regularly being used outside of the disclosed parameters, such as if it is parked on the street instead of in the garage as communicated and then stolen, they will also be within their rights to refuse a claim. Similarly providing false information when submitting a claim is one of the easiest ways to have your claim rejected.

Read the fine print

Insurance cover is an agreement between the vehicle owner, and the insurance company and each party needs to stick to the conditions laid out in the insurance policy schedule for the agreement to remain feasible and work as it should. Be sure to read the fine print of this agreement in order to ensure that you stick to your end of the agreement and that all valid claims are paid out without any hassle.