Insurance brokerage and risk advisors, Aon South Africa, says that South Africans should be aware of unexpected insurance costs when dealing with car theft.
While insurance is an essential aspect of recovering financially from vehicle theft, there are still unexpected costs you may not have planned for, and some which you cannot attach a monetary value to, it said.
“The best advice is to mitigate your risk as far as possible with correctly scoped insurance and advice, deploying security measures to deter would-be criminals, strictly adhere to road safety rules and to drive defensively,” said Mandy Barrett, of Aon South Africa.
One key issue raised by the group relates to car jamming, which is seen as a growing trend in South Africa – especially in public parking lots such as shopping centres and petrol stations.
Car jamming occurs when a criminal uses signal-blocking technology which effectively blocks a vehicle from locking properly.
This is because South African motorists often walk away from their cars while pressing their remote without ensuring that their vehicles are physically locked.
In most cases, personal insurance policies cover the theft of insured property from a locked vehicle subject to the limitations and conditions of the policy.
However, Aon said that there is generally no cover if there is no evidence of a break-in to your vehicle – making it important to check that your car is locked securely before walking away.
Some of the other insurance pitfalls which it said that motorists should be aware of include:
- Insurance deductible or excess – an insurance claim is subject to a basic excess, usually 5% of the loss, which is something to take into account. If you are over the age of 55 years, you don’t pay a basic excess on Aon designed personal products.
- Your monthly motor insurance premium is likely to increase following a claim due to the loss of your ‘no claim bonus’.
- You can mitigate against theft by parking in a safe area and locking your vehicle at night. Most insurers will offer a premium discount should you volunteer to install an approved tracking system where the policy condition does not require one.
- Check that you have included the maximum car hire on your policy to avoid the cost and inconvenience of being without transport while your insurer is sorting out your vehicle following an incident.
- Avoid leaving valuables in your vehicle– if unavoidable, make sure it is out of sight. Items that you bring along in your vehicle, such as your laptop, smartphones and luggage to mention a few, must normally be specified under your All risks cover, or these items won’t be covered.
- Understand the Basis of Loss Settlement on your insurance – Retail value is the price at which the dealer will sell a vehicle to you. Market value is what you could expect if you trade the vehicle in. Insurers will usually stipulate on which basis the claim will be calculated.
- Credit shortfall cover should be taken where the outstanding balance exceeds the retail value of the vehicle, enabling you to settle outstanding debt if your car is stolen or written off.
“Your ultimate goal is to mitigate your risk as far as possible and have appropriate insurance in place for those mishaps that cannot be avoided, putting you back in the same position – financially – as you were before the loss,” said Barrett.