For many of us, car insurance can be a grudge purchase – and there are equally as many of us who have been let down by an insurer. Industry veteran Jeff Osborne of Gumtree Automotive shares his insights into what we all should (or shouldn’t) be doing in terms of car insurance.
- Don’t opt to self-insure
“There really is no such thing as “not having insurance”,” says Jeff Osborne. “If you don’t take out cover, you’ve actually elected (legally) to self-insure, meaning that you will carry the cost of the vehicle if it’s damaged or written off. Perhaps you feel confident that you will be able to replace your car, but very few of us will be able to replace someone’s Ferrari if we rear-end it inadvertently! The Ferrari owner will probably have insurance and they will definitely claim costs back from you! And in many instances, not insuring your vehicle will be in contravention of the terms of your financing deal with your bank. You could stand to lose a lot more than the cost of your monthly insurance premium.”
- Do protect yourself
If money is your primary barrier to insuring, there are more affordable options, says Osborne. “You can elect not to have full, comprehensive insurance. Third Party, Fire & Theft insurance will protect your car against theft, fire-related damages, and damages you have caused to another person’s car during an accident. The premium is much lower and you will still enjoy the cover you need.”
- Know EXACTLY what your coverage affords you
Too many individuals assume that their insurer will respond with road side assistance and a courtesy vehicle the minute their tyre goes flat, but the reality is that those services aren’t a given. “I’ve often heard of individuals who thought they would receive comprehensive roadside assistance only to discover that their company only assists with mechanical failures rather than tyre changes,” says Osborne. “It’s best to know what to expect before you run into trouble – not when you are stuck in the middle of the road in the pouring rain on a Monday morning. Find out exactly what your cover affords you and make adjustments if it doesn’t suit.
- Don’t let car maintenance slip
Although car maintenance may be a very different kettle of fish to insurance, they do go hand in hand. “Supposing you cause an accident. Your car is safety towed by the insurer, sent to the panel beater for repairs and all seems to be going well until the assessor examines the vehicle…and discovers that you’ve let your tyres become worn well past the legal limit. They will quickly repudiate your claim in its entirety and you will be responsible for all the damages incurred,” says Osborne. “You have to make sure that you keep up with the required maintenance, as per your policy, to avoid that scenario. Don’t ever put necessary repairs off.”
- Don’t over-insure
“Over-insurance is an unnecessary drain on your finances and moreover, you won’t receive the money back in the event of an accident,” says Osborne. “Have your vehicle evaluated annually and make sure that your premium is in line with the current book value of that car. Talk to your insurer and keep those values aligned.”
- Do shop around
Osborne says that individuals shouldn’t be overly keen to sign with the first insurer they meet. “The web has made it so much simpler to shop around and compare prices and values. Make a decision based on what best suits you and your lifestyle. Good insurance is absolutely crucial when the road gets bumpy and you want to make sure you are prepared.”