Comprehensive car insurance
While there are a lot of things that could happen to your vehicle, there is only one type of insurance policy that covers all eventualities: comprehensive car insurance. It’s the highest level of protection that can be assigned to your vehicle and will provide you with total peace of mind that your vehicle is looked after, regardless of whether you’re on the road or parked up.
However, what is included in a fully comprehensive car insurance policy can vary dependent on your insurer – so let’s consider the following:
In This Guide:
- Comparing comprehensive insurance to other policies
- What exactly does comprehensive car insurance cover?
- Is there anything comprehensive insurance doesn’t cover?
- Do I need comprehensive car insurance?
- What will happen if my car is written off or stolen?
- How can I ensure my comprehensive policy provides the cover I need?
Comparing comprehensive insurance to other policies
The fundamental difference between fully comprehensive insurance and limited cover (policies like “third-party only” and “third party, fire and theft” are classed as limited cover) is that comprehensive insurance protects your own car in the event of any damage sustained in an accident – even if the accident was your fault.
Limited policies will only cover damage caused to other vehicles, leaving you to be accountable for the damage sustained by your own car.
What exactly does comprehensive car insurance cover?
Comprehensive insurance covers damage sustained by fire, theft or hijacking, as well as covering any third parties in the event of a claim being made against you. In the event of an incident taking place, your insurer will either compensate you at a reasonable market value, compensate you for the amount your vehicle is valued at, or cover the costs of repairs for your vehicle, minus the applicable excess. Excess payments exist (even with fully comprehensive insurance) to make injured parties co-responsible when a claim is made. Generally speaking, the higher your excess, the lower your premium will be.
Is there anything comprehensive insurance doesn’t cover?
While a fully comprehensive policy will cover your vehicle in the event of most accidents, it will not cover the general wear-and-tear, servicing and maintenance of your vehicle. Things like mechanical faults or breakdowns won’t be covered by your policy, and general depreciation and gradual wearing down of components (like tyres and brake pads) will be solely your responsibility.
Before signing a contract, you might want to discuss whether car hire is included in your policy. Some insurers offer a complimentary hire car as part of the package when your vehicle needs to be taken to a garage for repair work.
Do I need comprehensive car insurance?
Unlike most other countries, there are no laws governing car insurance in South Africa. However, having a good insurance policy will ensure that you are legally and financially covered in the event of a car theft, accident or mishap.
If your car is of significant value or is relatively new, it’s almost certainly worthwhile taking out a comprehensive car insurance policy. Older cars with lower market values might not be worth the extra costs associated with a comprehensive policy.
Some car loan providers will insist that their customers take out a comprehensive insurance policy. This helps to protect their asset while the owner pays it off. In these circumstances, you may find yourself without a choice but to arrange for a fully comprehensive insurance policy.
What will happen if my car is written off or stolen?
If your car cannot be recovered or it is too uneconomical to be considered for repairs, your insurer will refer to this as a “total loss”. If your car was insured for significantly less than its average market value, you could end up with a pay-out amounting to less cash than you will need to replace the car with a similar model.
Some insurers offer comprehensive policies with the option to insure your car at a guaranteed amount. These policies are popular with owners of brand-new cars, nearly new cars and luxury cars because they guarantee a suitable compensation amount. These options help to remove any uncertainty during a claim and provide peace of mind.
How can I ensure my comprehensive policy provides the cover I need?
Put simply, it’s important to do your research prior to signing any contracts. Be certain to read the small print and be prepared to discuss any policies in detail with your broker or prospective insurer.
You may find it beneficial to use a car insurance comparison site like Money Expert to help you gain a list of like-for-like quotes. With a trusted advisor, you’ll also be able to clearly see the differences in policies. For example, a cheaper policy might not cover any belongings left in a vehicle that has been stolen. Other companies might only cover items which have been listed as permanently stationed in the car (such as a stereo or satellite navigation system).
It really pays to shop around to find a deal that suits your requirements. Should the unthinkable happen, you won’t want to have to experience the stress of being told you’re not correctly insured – if possible, don’t be afraid to slightly “over-insure” just to cover all possibilities.