Most of us take out car insurance as a matter of course, mainly because we either want the peace of mind of knowing that we will be reimbursed if something untoward happens, or because it’s a condition of a hire purchase agreement.
We pay attention to the major details, like what our premiums will cost, what our insurance covers, what our excess will be and what our total payout will be if our car is stolen or written off.
So it’s essential to understand the different types of values against which you can insure your car…
But we don’t always pay attention to the finer details. There are a few important things that you may not know about your car insurance. These are typically standard elements of any insurance policy; they’re not there to trip you up or to allow your insurance company to unfairly benefit.
Perhaps you already know these things about your car insurance, but you’ve never understood the reasons behind them. So here are the answers to these questions – and important information for those who are unaware of it…
Why do I still have to pay an excess if the other party was at fault?
If your car insurance policy includes an excess amount, it means that you need to pay this amount on any claim you make, as the first amount paid towards to the repair or replacement of your car. It doesn’t matter who the guilty party is, as your insurance company is still paying you out against your insurance policy. It costs your insurance company the same amount of money to cover your loss, no matter whether it is your fault or that of the other driver. So your excess still applies. The administrative cost to your insurance company is also the same.
Can I get this excess back?
We understand that it ideally shouldn’t cost you money if you are involved in an accident that is someone else’s fault, so we will do everything we can to recover your excess amount from the guilty party, or their insurance company. Of course if the person was not insured, this may end up being a lengthy process, and there is no guarantee that we will be able to recover the amount.
We are not obliged to do this - it’s a service that we offer to you at no charge.
Why does my premium increase annually while the value of my car depreciates?
Remember that you are not only covered for the theft or total loss of your car. We are also covering you for car repairs. Which means that there is an inflationary aspect to the costs that we cover.
Car part costs increase every year, especially if they are imported, and so does the cost of the labour involved in car repair. If we are to be able to fully cover these increasing costs, we unfortunately have to increase your premium each year to keep pace with these increases.
However, we do still take into account the depreciating value of your car when evaluating your premium, so you still get an element of benefit from this depreciation in your new premium amount.