Ever heard the saying “The Devil is in the detail”? When it comes to insurance, that idiom rings true. When last did you take the time to read your policy wording, when it arrived in the post? Very few of us bother to open the envelope, let alone find the time to read through it. Insurance is a contract between the insurer and the insured (that would be you). Every contract is bound by a set of rules that both parties agree to. The fine print in your policy could be defined as the “rule book”. If you break the rules, you might be sitting with a repudiated claim (that means the insurer isn’t going to pay).
In this blog post we’ll look at the stuff that might be in your policy wording that could come back to bite you if you haven’t taken the time to read through it.
Where is your car parked at night & during the day?
Your insurer wants to know where your car stays overnight and where it’s parked during office hours. Different suburbs in South Africa have different risk ratings (mostly based on the number of reported crimes in that area) and insurers use that information to rate your risk and quote you a car insurance premium. It’s your responsibility, if you change your risk address, to notify your insurer of that change and to provide them with the new address details. If you don’t, they could come back and point to the section in your policy that states you need to inform them of a change in the risk address. Just remember that if you move to a new house, or change jobs, let your insurer know immediately. Worst case the premium increases slightly. You might even get a discount.
Who drives your car?
When the telesales agent asks you over the phone, “Are you the driver of the vehicle?” are they asking you if you are the only person driving the car? Most insurers will entertain a claim if the person driving the car has a valid South African driver’s license. So, if you hand your kid the keys to go and pick up some milk and bread from the corner convenience store, and they have a prang, you should be covered. Note how we used the word “should”. You need to check if your insurance only covers you behind the wheel, or if you will be covered if a third party drives your car and is involved in an accident.
Are you using your car for personal or business use?
If you drive to work and back every day, your vehicle should be insured for personal use. If you take your car to work and then drive around seeing clients the entire day, your vehicle should be insured for business use. A vehicle that is used for business use is probably on the road more often than a car used for personal use and, as a result, the premiums charged are higher. Don’t insure your car for personal use if you are using it for business. At claim stage your insurer is going to ask some tough questions if they suspect you took a chance, and they might even decide not to pay your claim. Could you imagine being stuck without a car and still owe the bank a few hundred thousand Rand. Not an ideal situation. If it’s a grey area, rather ask your insurer. You might be office bound but occasionally need to shoot out to see a client. Is that business or personal use? Your insurer will have an answer to that question, and it probably has to do with how many times a month you use it for a “business visit”.
In which countries are you covered?
Probably in the following countries: South Africa, Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland and Zimbabwe. That means you can’t decide to load up the Land Rover and take a drive up to Egypt with your mates. Well you could if you’ve called your insurer and they’ve given you the thumbs up.
Watch out for car hire with short periods of cover
If you opt for car hire it’s generally for a period of 30 days. It’s important that you note how long the car hire is valid for because if you bring the car back 60 days later, your insurer is going to ask the car rental company to bill you for every single day after the car rental expiry date. It’s a tricky situation because sometimes you are at the mercy of the panel beaters and their ability to source parts (especially if you drive a foreign car). If you don’t have a spare car at home, take the car hire option and opt for the maximum coverage.
Is your car roadworthy?
If your car is unroadworthy and you are involved in an accident, don’t expect your insurer to pay. The biggest one here is tyres with no tread. Imagine for a second it’s the middle of summer in Johannesburg. There is a good chance of a thunder shower every afternoon, right? Let’s assume you’ve been meaning to replace your threadbare tyres, but you haven’t got around to it. You are involved in an accident and the first thing the assessor is going to have a look at is the state of your tyres. You can’t win the argument and just because you neglected a small thing like replacing your worn tyres, you are left sitting with an unpaid claim that amounts to thousands of Rand. Keep your vehicle maintained and remember it always needs to be in a roadworthy condition.
Do you have factory fitted sound or something more exotic?
Who doesn’t enjoy streaming your Spotify playlist through your speakers, while cruising the burbs? If your sound is factory fitted it’s included in your vehicles’ sum assured. If you have invested some cash into upgrading your “boom box” then give your insurer a call. That item needs to be specified because if your car gets nicked, the insurer has no record of the upgrade and you are going to be pretty upset that you have to shell out the cash again. In actual fact, any upgrades to your vehicle should be noted on your policy.
You can’t. That’s it. Grab an Uber, china.
Remember to ask the right questions when you take out your car insurance and please take a minute to run through your policy wording. It could save you a couple hundred thousand Rand.
Until next time.
The Wise About Life Team