The most basic definition of insurance is that it is the transfer and distribution of risk. A contract is entered into between the insurer and the insured and this agreement should be clear about what it is that is insured and the risk involved. The amount payable should be made clear, along with the amount of the premium payable by the insured and the period of the insurance.
Motor insurance quotes can be used to give consumers an idea of how much they will need to pay in premiums on a monthly, quarterly or annual basis.
The motor insurance cover that you get should not only be based on the price. You should also remember that the insurance company bases its decision on a range of factors.
These factors include:
Certain areas are at a higher risk for theft and hijacking, so an insurance provider will probably regard you as high-risk if you live in such an area. You may then be charged a higher premium as a result.
High performance cars are high-risk, so if you drive one of these cars you will be charged a higher insurance premium.
Young drivers are statistically considered high-risk, so they will be charged higher premiums.
The type of cover you have
In South Africa, there are generally three types of insurance cover:
- Comprehensive– This covers just about any risk that your car is exposed to. This could include theft, hijacking, damage caused by accidents, fire, hail, water damage etc
- Third Party, Fire and Theft– This insurance covers you for when your vehicle is hijacked, stolen or attempted to be stolen.
- Third Party Only- This is cover against damage you cause to other vehicles or people when you have an accident.
The use of your car
Your No Claims Bonus
Your voluntary excess