Vehicle Insurance: Drive with Peace of Mind

Both private and commercial motor vehicle insurance can cover you for accidental damage, if your vehicle is stolen, vandalised or involved in any accidents with a third party. Even though your vehicle may not be damaged, accidents can involve other people, other vehicles and other people’s property, for which you could be held liable.

It is important to check which benefits are included with any cover and ensure they are tailored to your needs. Benefits to consider include:

• Repair or replacement of your vehicle up to the market or agreed value
• Transport and towing expenses
• Windscreen and window glass cover
• Protection against uninsured drivers
• Rental cover to get you back on the road in case of a claim

There are generally three levels of cover to choose from for both private and commercial vehicle insurance.

1. Fully Comprehensive (agreed or market Value): Provides cover for accidents, theft, fire, vandalism and storm damage as well as damage to someone else’s vehicle or property caused by your car.
2. Third Party, Fire & Theft: Provides cover if your car is stolen or damaged by a fire, as well as damage to someone else’s vehicle or property caused by your car but does not cover damage to your car.
3. Third party only: Provides cover if you cause damage to someone else’s vehicle or property but does not cover damage to your car.

Some key insights worth considering are as follows:

• Certain occupations, like driving instructors, real estate agents, couriers, taxi or Uber drivers, are not covered under a private vehicle insurance policy.
• For drivers under 25 years of age, a higher excess or insurance premium may apply.
• If you use your personal vehicle for work travel as well, you may require commercial vehicle cover to protect you.

Having a clear understanding of these cover options will help you make an informed choice to protect your assets.

If you have decided on full comprehensive cover, the next step is to decide if you want to insure your vehicle for an agreed or market value.

• Agreed value: This is the maximum amount your car will be insured for in case of total loss or theft, and it should be enough for you to buy a vehicle with the same specifications. One of the benefits is greater certainty over how much you will receive for a replacement vehicle if your car is written off, although your agreed value will normally be adjusted annually to account for depreciation. A replacement vehicle may cost more or less than the agreed value, depending on market conditions at the time.

• Market value: This is based on the amount the retail/open market is currently paying for your vehicle just before it was damaged or stolen. The insurer will usually obtain a pre-accident valuation at the time of loss and the value may differ from the price you paid for the vehicle originally. The amount should be enough to obtain an equivalent replacement vehicle in the current market.

A vehicle valuation is an effective way to determine an accurate sum insured figure for your insurance policy. An accurate sum insured can help ensure you get fair and accurate compensation in case of loss or damage to your vehicle.

To help you work out how much your vehicle is worth, there are several online tools available including the following:

• Trade Me 
• Consumer Reports 
• Valuemycar