Vehicle Insurance – 5 Basics to Consider

What is vehicle insurance comprised of?

Bodily injury liability

If you have comprehensive insurance you will be covered for any injuries you may sustain in an accident. This type of cover will also provide financial compensation for third parties injured in an accident. 

Property damage liability

If your car crashes into someone’s property for example, with the right type of vehicle insurance cover you can get financial protection for property damage liability.

Medical payments or personal injury protection

If you are injured in an accident or a third party is injured, your insurance will pay for medical costs.

You can lower your vehicle insurance premiums

There are a range of ways that you can lower your premiums, so you don’t have to accept the first quote that you get.

You can choose to raise your voluntary excess

This means that you have to pay that amount out of your pocket

You can usually choose the level of cover that you want

If you’re driving a new vehicle that is financed by the bank, you need to take comprehensive cover. Otherwise, you have the choice between:

  • Comprehensive
  • Third Party, Fire and Theft
  • Third Party Only

Premiums are based on individual factors

Insurance companies base their decision on a range of factors, such as:

  • Your age
  • How long you have been driving
  • Where you live
  • The type of vehicle you drive
  • Your level of risk

The degree of financial responsibility the insurer assumes depends of the type of insurance policy that you have chosen.

If a damaged car’s repair costs exceed about 70% of the car’s value, the vehicle will generally be written off. You will be paid the vehicle’s “market” or “retail” value, depending on the terms of your policy. It’s important to make sure that your vehicle is insured for retail value.

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