Insurance is known as a product where the value only becomes apparent when you claim, known as the zero moment of truth. We look at car insurance myths and legends versus the hard truth
In South Africa, speeding fines have absolutely no bearing on car insurance premiums and will not be taken into account. If a car insurer mentions a history of speeding fines, then alarm bells should go off. However, driver behaviour is starting to play a role in the development of new insurance products, where in future insurance companies may be able to reward you by lowering your premiums for good driver behaviour. They do this by tracking your driver behaviour with a telematics device.. Are you frustrated paying too much every month for car insurance? Click here for a free quote.
The age of your car does not have any bearing on determining car insurance premiums. Instead the price of your vehicle does. More specifically, when determining the premiums, factors such as the value of the car, the value and availability of spare parts, and any previous car insurance claims are taken into account.
Your car insurance policy only covers the private use of any covered vehicles. If you use your car for commercial purposes, you will have to get it insured under a business vehicle insurance policy. Ensure you discuss this fully with your broker or insurance company.
You are not required by any law to possess car insurance, although the South African Short Term Insurance Association is lobbying for government to introduce compulsory third party motor insurance. The Road Accident Fund offers some compensation if you sustain injury in a car accident, but they do not offer cover for material damage. Therefore, in order to protect yourself from litigation in case you cause a car accident or from financial loss, you are encouraged to take out comprehensive insurance which protects your under all circumstances. As long as you play by the rules of course.
While generally, yes, cheaper, older cars incur lower premiums, for the simple fact that they are cheaper to replace, other factors also play a role. For example, road worthiness and unapproved or sporty alterations that raise alarm bells. Age and driver experience also play a role.
While it is true that the more experienced a driver is, the lower his premiums will be, there are also other factors to consider. Past insurance premium payments , and the condition of the car also play a role in determining how much your premiums decrease by. An extra tip is that if you are a male, under 25, avoid buying a sporty or turbo model which may increase your risk profile, and thereby your premiums.