When it comes to buying car insurance, most South Africans choose price as their determining factor in deciding.
This means they may opt for a basic insurance type with lower premiums, namely third-party only insurance. But this can be a mistake if you don’t know exactly what you’re covered for. Or more importantly, what you’re NOT covered for.
Below, we look at common mistakes people make when choosing basic insurance:
Mistake 1: Not considering your own damage
Third-party-only insurance covers damages and injuries that you cause to other people and their property. However, the major drawback is that it doesn’t cover damage to your own vehicle. Imagine you’re in an accident where you’re at fault or where your car is vandalised; with third-party-only insurance, you’ll be left to cover those repair costs out of your own pocket.
Mistake 2: Not considering protection against theft and vandalism
South Africa faces its fair share of crime, including vehicle theft and vandalism. If your car is stolen or damaged by vandals, third-party-only insurance won’t offer you any financial help. This can be a big financial setback, especially if your car is your main mode of transport.
Mistake 3: Not considering the weather
South Africa experiences its share of extreme weather conditions, from heavy rains to hailstorms. If your car is damaged due to such natural events, third-party-only insurance won’t provide any assistance. This lack of coverage can be particularly concerning if you live in an area prone to severe weather.
Comprehensive insurance, on the other hand, typically covers damage from hail, floods, and fires. This means that if your car is caught in a storm or damaged by a fire, you won’t have to bear the brunt of the repair costs yourself.
Mistake 4: Thinking you have add-ons … when you don’t
Comprehensive insurance often comes with added benefits that third-party-only insurance doesn’t offer. These perks can include roadside assistance, car hire coverage, and even insurance for personal belongings inside the vehicle. If you frequently travel or rely heavily on your car, these added benefits can be invaluable.
This is especially true if you assumed your basic cover would provide those benefits, and then find yourself in a situation where they don’t.
Mistake 5: Not thinking about the long-term costs
While comprehensive insurance comes with higher premiums compared to third-party only insurance, it can actually save you money in the long run. The financial protection it offers can prevent significant out-of-pocket expenses for repairs, theft, or extreme weather. Over time, the peace of mind and potential savings from having comprehensive coverage can outweigh the initial cost of higher premiums.
Mistake 6: Not taking your peace of mind into account
Finally, one of the biggest advantages of comprehensive insurance is the peace of mind it provides. Driving with the knowledge that you’re fully covered against a wide range of risks allows you to focus on the road and enjoy your driving experience without worrying about the financial repercussions of unforeseen events.
With basic third-party-only insurance, you’ll know that other cars and drivers are covered but will still have to pay out of pocket for your own damages. This can be stressful when you take on our dangerous South African roads.
Mistake 7: Underestimating the Risk of Fire
People often underestimate the likelihood of their car being damaged by a fire. This could be due to an engine malfunction, a wiring issue, vandalism, or an external event such as a veld fire (a regular occurrence in South Africa)
While fire damage isn’t as common as other types of accidents, they can cause total loss of your vehicle. It’s important to note that third-party-only insurance won’t pay you out for fire damage. For that you’ll need third-party, fire, and theft insurance or a comprehensive policy.
Final word
In short, the biggest mistake when it comes to basic insurance is not taking the time to understand your policy.
While third-party-only insurance can be a cost-effective option, you might get a nasty surprise when it comes to claims time and you’re not covered for as much as you thought you were. That’s why it’s so important to make sure you understand car insurance types.
Comprehensive insurance offers broader coverage and may actually be a cost-saver in the long run. The more you know!