Car Insurance: A Costly Affair In South Africa!

The insurance industry in general is fraught with plenty of risks, especially in South Africa. This has resulted in average car motor insurance prices here being very steep. On the whole, insurance costs related to any vehicle can work out to be very expensive here. Even the terms and conditions associated with an insurance policy here can be very stringent. Most car motor insurance policies here will state that all vehicles and cars install vehicle tracking mechanisms or immobilizers. The overall value of the car will decide the extent of premium to be paid each month or quarter.

How it works

The way the car motor insurance sector in South Africa works is that when the car or vehicle gets damaged, the provider pays an amount based on several factors. These factors are assessed in advance and include aspects such as the make and model of your car, how old your car is as well as the relative condition of the car at present, as well as the replacement costs involved. You would need to be the extra remaining amount depending on how old the driver of the car is as well as his or her relative experience in driving. In the case of more experienced drivers you do not need to pay too much excess.

The complexities involved

The car motor insurance companies in South Africa have quite a complex method of determining the premium amounts as well as excess to be paid in case of damages to the car. A lot of the estimated amount will depend largely on the amount of experience you have in driving the vehicle. If you are inexperienced or a first timer in driving, then you would initially need to shell out a large premium amount each month in South Africa. This will continue unless and until you are able to show the car motor insurance company that you are experienced enough to drive safely. On the other hand if you are already an experienced driver then you stand to gain in the long term. For starters, the initial premium amount is much lesser as compared to the ones levied on amateur drivers.

A mandatory requirement

In South Africa it is mandatory to get access to car motor insurance. In fact even if you intend on purchasing a brand new car you still need to invest in insurance beforehand. The financial institution that is granting you the car loan will also insist that you get an insurance done. However, if you are buying a car for the very first time then the experience can be quite scary and intimidating for you!
Preferred insurance companies

Most financial institutions will usually enter into a partnership with a car motor insurance company and when you get a car loan from the financial institution you might be ‘coaxed’ into going for insurance with this ‘preferred insurance provider’. However, you as a consumer need to exercise your right to choice as well as the ability to decide on your own before taking insurance with this car motor insurance company.

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