When insuring your vehicle, we often see the following line items: Comprehensive Cover, SASRIA, Third Party Cover Fire and Theft, Third Party Only Cover and the word ‘excess’ is used.
Comprehensive Cover is the best cover for your vehicle which ensures that in the event of an accident you are fully covered. This includes theft, hail, accident damage and fire, but excludes any maintenance-related damages. *
SASRIA stands for the South African Special Risks Insurance Agency which is a government-run agency providing cover that is normally excluded by a standard policy. These covers include damages caused by civil commotion, strike, riot, public disorder, and terrorism. This cover is very inexpensive.
Third Party Fire and Theft Cover ensures that if you have an accident, your insurer will indemnify the other party by covering the cost that the other party may try to recover from you. There will be no compensation for your own damages. You will however be covered if the vehicle is stolen and not recovered; or if the vehicle catches fire.
Third Party Cover ensures that if you have an accident, your insurer will indemnify the other party by covering the cost that the other party may try to recover from you. There will be no compensation for your own damages.
Excess is the amount payable by you, the policy holder, in the event of a claim. Excesses are payable for windscreen damage, vehicle damage, as well as a in some cases a non-specified driver in a restricted policy; a driver who is under the age of 23 for example, or a driver who has a Driving License for less than two years. Most insurers offer the option of waiving the basic or all excesses at an additional premium.
Bob has his first job and is eager to move out of his parents’ home. His father, Geoff, has gifted Bob with the family’s old car. Part of Bob moving out is that he must pay for his own insurance for both his car and personal belongings (read ‘Household Contents Cover Continued – How is your Insurance Calculated’ here).
Bob contacts the insurers he has heard of and does a search online. He has received several quotes and other than the cost, he doesn’t quite know which insurer to choose. When reviewing the quotes, he notices that the insurers have included Comprehensive Cover, SASRIA and Third-Party Cover. He’s quite shocked to see how high his excesses are – he is told that his high excess is because he is under the age of 23 with a Driving License for less than 2 years (see ‘Personal Motor Vehicle Insurance – Who is covered in an accident?’ here for more information). To try save costs, Bob requests that Comprehensive Cover is removed off his quote as he’s only using the car to purchase groceries over the weekend, as he’ll be catching a lift with a friend to get to work, so he’s not really driving the car very much.
One quiet Sunday afternoon, Bob goes to get his weekly groceries. Outside the shop, he waits patiently at the Stop Street. Bob enters the clear road, when all of a sudden, Bob hears a crashing sound and feels a massive push. Bob has collided with another vehicle in the middle of the road. Both drivers are unharmed but there is quite a bit of damage to both vehicles. The drivers exchange details, and both drive off as both vehicles can still drive.
At home, after notifying his parents, Bob contacts the call centre number for his insurer to notify them of the accident. He receives a reference number and is notified by his insurer that they will not cover the cost to fix his own vehicle, but his insurer will indemnify the cost of the damage to the third party. This is because Bob removed Comprehensive Cover. Bob is crestfallen, although the car was not worth much, Bob doesn’t have enough savings to buy a new car and is very annoyed because he paid a monthly premium to insure his car.
Do not fall into a trap by removing items off your insurance without understanding the full implications of doing so. It is important to have adequate cover for what you need.
The industry average of claims submitted without Comprehensive Cover is outstanding. Customers, like yourself, have been liable in excess of R 29bn, with 1 in every 5 people removing Comprehensive Cover to save costs, not because it is not needed.
Comprehensive Cover Continued: Should an accident be your fault; your insurer will also entertain any third-party approaches. If your vehicle is a total loss, that is, it is written-off following an accident or stolen and not recovered; the insurer will, in most instances, pay you the current retail value of the vehicle less any applicable excess. Certain policies still exist where settlement is based on market value. These values are based on the information contained in the Transunion Auto Dealers Guide.