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INSURANCE (1)
Comprehensive cover
When you buy a car on credit, the lending institution
will require that you take out comprehensive insurance
for the duration of the contract. However, it cannot
force you to use a specific insurance firm. It is
up to you to shop around and find the best policy
for you, and this does not necessarily mean the lowest
monthly premiums. You can ask the insurer to raise
the excess in exchange for lower premiums, but think
carefully about what you need. And remember, accidents
do happen, and car theft is quite rife.
Usually, an insurer will replace your car if it is
written off in the first year, but after that it depends
on the market value of your car. Remember, when you
drive a new car off the showroom floor, it loses a
large percentage of its value immediately. Insurance
premiums are worked out on the value of your car,
and this will change annually. However, this does
not mean the insurer will automatically adjust your
premiums. It is up to you to ask the insurer to revalue
your vehicle. Do it at least once a year, and shop
around again. You don't have to stay with the same
insurer.
Besides your preferred excess, there are also other
factors that will influence your monthly premium;
 Driving
record – how often have you claimed in the
past? A clean claims record will be
of great benefit - Your age – if you're under 25, expect to
pay more
- Location – some areas are hotspots for theft,
so you'll pay more if you live there
- Intended use of car.
Third party insurance
If you have an old car that is not of great value,
it is an option to take out just third party, fire
and theft insurance. The premiums are much lower,
and cover you in case of theft, fire or if you drive
into someone else's car. The policy will then pay
for the other person's damage but not your own. If
you are not the person at fault, you may be able to
claim from the other person's balance of third party
insurance. However, these claims can be tricky, and
usually require a visit to a civil court.
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