Motorists who do not have insurance on their vehicles run the risk of having to make significant financial outlays in the event of crashes, not only for themselves but for others involved in these incidents.
The Automobile Association (AA) says it remains concerned that less than 35% of vehicles in the country are insured.
“Vehicle insurance is not a legal requirement in South Africa. According to the South African Insurance Association (SAIA) about 65% of South African motorists are not insured. There are approximately one million road accidents reported annually in South Africa which means there is a high chance that a crash will occur with an uninsured driver,” notes the AA.
Data from around the world shows that insurance policies improve the overall risk management of policy holders, which in turn encourages road users to exercise greater caution and care on the road.
“The risk of not having vehicle insurance means that when an uninsured motorist is involved in a crash and they are at fault, they will have to pay for the damages to their own and the other vehicle out of their pocket.
“This could leave the driver with several major issues including not enough money to cover repairs on their own vehicle and therefore leave them without transport, and financially worse off than they would have been with insurance,” says the AA.
Besides the safety aspect, increasing the number of insured drivers on our roads will translate into the reduction in the cost of motor insurance which is the number one reason that motorists cite for not having vehicle insurance.
Here are some benefits to having vehicle insurance
- Pays for the damage: If you have an accident and it is your fault, you will have to pay for your own car’s repairs, as well as the other person’s car. The rising cost of repairs and car parts should serve as motivation for vehicle insurance.
- Replace a stolen car: If the unfortunate happens and your car is stolen, the last thing that you would want to worry about is how you will replace the stolen car. With the right insurance cover, you could replace the stolen vehicle.
- Roadside assistance: One important benefit is roadside assistance, because you never know when you might need it. Whether it is a flat tyre that needs replacing, or you have run out of fuel, there is a service to help.
- A negative effect on your creditworthiness: Another unintended consequence of not insuring a car on which you still owe money is that you may struggle to get a loan for another vehicle. If you are still paying off the original loan and you do not have enough disposable income, you might fall below the affordability limit to qualify for more vehicle finance. It can also affect your credit profile, making it even more difficult to get other forms of credit.
Ways to save money on vehicle insurance
- Buy a cheaper car: The lower the value of your vehicle, the less it costs to insure.
- Request a policy review: Cars depreciate every year and circumstances may change. Conduct an annual review with your insurer.
- Drive less: Keeping mileage as low as possible means less time on the road and therefore reduced risk of an accident, theft, or damage.
- Keep it safe: Insurance premiums for vehicles that are safely locked up in a garage at night will be lower than for vehicles that are left outside.
- Use Technology: Vehicles fitted with tracking and anti-theft devices are cheaper to insure, as are vehicles with telematic devices that monitor driver habits and vehicle usage.
- Avoid unnecessary claims: Not claiming for small damages and thus keeping a claims history in check will have a positive effect on premiums.
- Stay insured: Do not let insurance lapse and don’t cancel because it’s too expensive. Gaps in your payment history might mean a higher premium.