In many countries, motor insurance is the only way to receive a licence for a vehicle.
“Operating a vehicle without the minimum insurance can lead to traffic offences and fine,” according to Melvin Howes, supervisor of personal lines, property and casualty at CG Insurance.
But on top of the legal requirements, motor insurance gives peace of mind by providing financial protection, personal safety and third-party liability.
With that in mind, selecting your motor insurance and understanding exactly what’s covered is the next hurdle. It’s important to consider what is the right coverage depending on your circumstances.
“If you own an expensive vehicle, it is recommended to invest in comprehensive coverage to safeguard it against unforeseen events, like accidents, damages, theft and collisions,” said Mr Howes.
While selecting the coverage necessary for your needs you may come across terms that can often be confusing. Terms like “insurable value” most often refers to the estimated value of the vehicle, this pertains to the worth of a new or used vehicle. Generally, the value of a vehicle typically depreciates over time due to its age.
A “deductible” on the other hand is the initial amount the policyholder must pay before their insurance policy covers damages to their vehicle. For example, Mr Howes explained, if your car policy has a $500 deductible and you have an accident that causes $3,000 in repairs to your vehicle, you would be responsible to pay the first $500 deductible, and then your insurance would cover the remaining $2,500.
If you are involved in an accident, it’s essential to understand how to navigate the claims process.
Mr Howes recommends the following to efficiently navigate the process:
- Prioritise safety by ensuring everyone’s wellbeing, adhering to standard procedures and by contacting authorities immediately after the accident.
- Exchange information with the involved parties.
- If possible, capture photos of the accident scene including any damage.
- Without delay, contact your insurance provider’s claims department to initiate the claims process, providing all necessary details and documentation.
- Your assigned claims officer will confirm your extent of cover and the next steps within the claims process.
To gain a comprehensive understanding of what will be covered, you should refer to your policy documentation.
Review the terms and conditions outlining the extent of coverage based on the policy you purchased. It’s also important to note that there is generally a requirement to notify your insurer of a pending claim within a specific timeframe, which is typically within 14 days of the accident.
Most insurers will also promote safe and responsible driving which can then result in discounts for their policyholders, so it really does pay to be a good driver!
