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No debate: Taking out vehicle insurance is a must

  • February 24, 2023



While not something most South Africans wish to talk about given the current state of the economy and escalating energy crisis, the simple truth is that having vehicle insurance is a must regardless of whether you buy a new or used car.

Of course, the biggest factor preventing owners from taking out insurance is the final amount that will either receive approval, or a description in not so polite terms when presented with it.

With current affairs in the country unlikely to improve anytime soon, the answer to avoid being ripped off when it comes to vehicle insurance, is to do proper research and not to exceed the limits of your wallet.

Don’t go overboard

This is according to Old Mutual’s Lizo Mnguni, who remarked that buyers should pay what they can afford and not go overboard on buying a vehicle that would ultimately cost more to insure than what they had expected.

“Once you have a shortlist of cars, call your insurer or broker to ask which car is more expensive to insure. Your broker will be able to tell you which car will help you save on your insurance,” he said.

He added that interested buyers should continue to monitor the media and track the opinions of journalists, as well as the number of vehicle awards in order to get a better understanding of which vehicles is the best.

ALSO READ: What to know about vehicle insurance policies

“The esteemed journalists have already done the legwork for consumers, and have considered things like value for money, total sales, and all-round worthy winners,” Mnguni continued.

How to save

When looking for ways to save on insurance costs, Mnguni says that two methods present the best possible option.

“If you have savings, you could consider using more of your rainy-day

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Car insurance in Singapore: All you need to know to get the cheapest rate (2022), Money News

  • August 17, 2022

3. What is excess? And how much should it be?

“Excess” refers to the amount you have to pay out of your pocket before the insurance company pays for the rest.

For example, Ryan is coasting down the freeway, headbanging to a Linkin Park album when a tree jumps in his path. He slams into it, and the cost to fix his car is $2,000. His excess is $600 (for a pretty comprehensive plan). So he just pays $600, and the insurer forks out the remaining $1,400.

Excess is inversely related to the cost of the car insurance plan. In plain English, this means…

Low excess = expensive insurance premium. If an accident happens, you’ll be very glad you need to fork out only $600, especially since you might already be stressing out over medical bills and having a rough time in general. But you will feel very broke when you pay for your annual car insurance premium. If you’re looking for a low excess of $300 to $400 or so, you can expect to pay $3,000 upwards for your annual premiums.

High excess = cheaper insurance premium. The good news is, you’ll get a bargain on your car insurance. The bad news is, you’ll be afraid to drive your car. This is a risk you might not want to bear unless you’re the safest driver on earth and enjoy the protection of a prominent deity.

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Note that if you add on a perceived “risky” driver – eg your kid (under 23 years old with less than two years of driving experience) who’s just gotten her driver’s license – your insurer might force you to accept an additional young and inexperienced driver excess without any discount on your premium.

4. Should I get comprehensive or TPO (third party

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