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Motor Insurance
Tuesday, May 1, 2007
Reckless, not wreckless

The cost of vehicle insurance has been on the up and up for several years now (by as much as 10%-20% annually in some cases), fuelled by increasingly reckless driving, traffic congestion due to the growing number of cars, the high cost of spare parts, and of course crime. There’s not all that much that you and I can do about some of these causes, but the one we’re most responsible for - and which will make the greatest difference - is the way we drive.

Compare your experience of driving to work with what it was a few years ago. You’ll probably be able to report a big jump in travel time, as well as the number of vehicles vying for the fastest-moving lane. But it’s likely that what you’ll notice most is the increasingly selfish and reckless driving practices of many road users, not to mention their naked aggression.
“The driving habits of many South Africans are just getting worse,” says Ben Tonkin, Corporate and Commercial Technical Committee chair of the SA Financial Services Intermediaries Association (SAFSIA). “And more reckless driving means more accidents, injuries and fatalities.”
Aside from genuine accidents, like a blow-out causing a car to spin out of control, there’s a lot that you and I can do to avoid accidents.
“The increased amount of stress that people experience on the roads significantly raises their chances of having an accident. But the good news is that you do have control over how you react to a bad driver.” Chasing after someone who cut you off is not clever. We have to learn to let go.
“In order to avoid accidents, you have to drive as though everyone else on the road is a maniac out to get you,” adds Mr Tonkin. “In particular, watch out for inexperienced first time drivers of all ages in high-powered cars, as well as those in old, barely roadworthy rattletraps. These drivers may not be directly responsible for causing accidents, but they may rile you enough to lead to a lapse of judgment.”
Another good idea is to set off for your destination earlier to give yourself more travelling time.
“If drivers thought that breaking the law would lead to hefty fines or even jail, I believe that driving habits would rapidly improve,” he adds. This is unfortunately not the current reality. “I believe there’s also a good case to be made for calculating people’s insurance premiums according to the traffic offences they’ve committed.”
There are several factors that are out of one’s control when it comes to vehicle crime, but one simple thing you can do is to lock your car doors when leaving it unattended. “One would think this is obvious,” he says, “but incredibly, in a police sweep of around 900 vehicles on the streets of a Johannesburg suburb a few years ago, they reported over 150 unlocked cars, some even with their windows down.”
Clearly, it’s going to take a lot to reduce the number of car accidents and consequent rising insurance premiums.
“The most important thing to remember when shopping around for vehicle insurance is you get what you pay for,” he says. “It’s not cheaper because you’re going direct, despite what all the advertising says. It’s cheaper because you’re not getting the same cover.”
“Consulting a broker does not mean your premiums will be more expensive – in fact, you often receive extra benefits because brokers are competitive without putting up the price of insurance.” Also, a broker is a great ally to have in the event that your insurer opposes your claim – an obvious concern when dealing direct with an insurer.
According to Mr Tonkin, the first thing you should do is establish what’s important to you about insurance. Do you want extra medical cover? Are you concerned about hail damage? Does your insurance cover you in the event of a break down, even far away from home where you may need accommodation and transport? Will the insurer pay for damaged locks and new keys? Many people assume these benefits are automatically included – but not necessarily so.
“As a consumer, you need to be fussy and ask clearly for the coverage you require, ensuring that the benefits you had on your old premium are included in the new one,” he adds.
Another way of reducing premiums is by choosing a higher excess. Obviously, the risk is only worth it if you’re happy to dip into your savings for an accident that wasn’t your fault.
“It’s also possible to reduce your premium by as much as 25% if you combine your vehicle insurance with other items with, for example, the contents of your home with the same insurer.”
 

Copyright © Insurance Times and Investments® Vol:20.4 1st May, 2007
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