One of the largest of expenses in anyone’s budget is that of car insurance. When times are difficult and money is tight, it is often tempting to consider doing without this cover or at least to downgrade it in order to save on premiums. However, think very carefully before you do.
Driving a car or riding a motorcycle without insurance is akin to playing Russian Roulette with your finances.
Insurance claims for vehicle accidents are made by insured individuals on average every three to five years. With the majority of vehicles on SA roads not insured it stands to reason that an accident will involve at least one uninsured vehicle.
A comprehensive insurance policy will, subject to its terms and conditions, cover damage to both your vehicle and the other party’s if the accident is your fault. If, however, you have no insurance cover and you cause irreparable damage to a luxury vehicle or property worth millions, you could lose everything you own.
Cancelling one’s motor vehicle insurance could be the most disastrous decision anyone can make. Nevertheless, times are tough and there may be no other choice other than to cut back. Whilst comprehensive cover is essential, as an alternative and hopefully temporary measure, one can change to “third party” insurance in order to save on premiums. At least in this case, damage to other vehicles and property is covered. Other options to save on premiums are to request a higher excess; adjust the cover amount to equate more to the car’s depreciated value; ask for a discount due to a claim free history or downgrade your vehicle and with it the cost of insurance. But don’t cancel your policy!
- 1 Mar, 2019