This is the widest form of cover and provides cover for any accidental damage, fire damage or weather-related (such as hail or flood) damage to your vehicle. It also covers theft or hi-jacking of your vehicle and provides third party liability protection if you cause damage to another person’s vehicle or property.
Third Party Fire and Theft:
As the name implies, this option only covers your liability to a third party if you cause damages to another person’s vehicle or property and it covers fire damage to your vehicle as well as theft of your vehicle. The premiums are usually around 30% to 40% cheaper than comprehensive cover as accidental damage to your vehicle is not included.
Third Party only:
This is the very basic and cheapest cover available. It only covers your legal liability to pay for damages to someone else’s vehicle or property. There is no cover for theft or for any damage to your own vehicle.
Factors to consider when deciding what type of cover to take:
It is widely known that up to 65% of vehicles on South African roads are being driven with no insurance. This leaves you hugely exposed if an uninsured driver crashes into you. Yes, you can hold the negligent party liable in law but getting any money out of an uninsured person is higly unlikely.
For this reason alone, we recommend that you take Comprehensive cover.
If you finance your vehicle the bank will insist on Comprehensive cover.
Third Party Fire & Theft may be appropriate if you own an older vehicle of low value that is not financed, if you live in a remote area where the risk of accident damage is reduced or if the vehicle is hardly ever driven and you want to save on some premium.
Third party only is recommended as the bear minimum cover and would be appropriate for older vehicles that are likely to get scrapped following a minor bumper bash. If there is little or no value in the vehicle itself but you want to protect yourself when you smash your jalopy into the back of a R5m Ferrari or drive through someone’s garden wall, then Third Party only will do the trick.
How you use your vehicle:
It is important that your policy caters for how you use your vehicle. This affects the premium and is considered material to the risk. Incorrect disclosure of how the vehicle is used or incorrect class of use stated on the policy could lead to rejection of your claim.
There are 4 basic classes of use:
Make sure that the class of use is correctly stated on your policy schedule.
It is important to check that you comply with the security requirements laid down by your Insurer.
Insurers will typically ask for a tracking system to be installed if your vehicle is above a certain value.
Some vehicle makes & models pose a higher theft risk than others and for these, Insurers may ask for a specific type of tracking device such as an Early Warning System or they may even ask for dual tracking systems to be installed in the vehicle.
Make sure you meet the Insurer’s requirements otherwise you could be in for an additional excess in the event of theft or even have your claim rejected if theft cover has been suspended due to non-compliance with security requirements.
Disclose your parking arrangements correctly to your Insurer.
If your vehicle is normally kept in a locked garage you are fine but if the vehicle is parked in an open carport, behind locked gates or on the street, make sure your Insurer is aware of this as once again, this is a material disclosure that could lead to claim rejection.
Who may drive your vehicle
Most policies allow for any person with a valid driver’s license to drive your vehicle.
In some instances, cover may be restricted to named persons only. This usually applies to high value vehicles, to high performance vehicles and to classic cars.
It is important that the regular driver (the person who tends to drive the vehicle on a regular basis) is correctly named in the policy schedule. If you decide to pass your vehicle on to your 19 year old kid to use for varsity for example, the policy will need to be amended.
Check your policy to see that the regular driver is noted correctly and that there are no driver restrictions.
The moral of the story – don’t try to get cheaper vehicle premiums by misrepresenting the facts.
Give us the correct information and let us negotiate the best deal for you.
This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)