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Busier Roads Mean Car Insurance Is More Important Than Ever

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  • 4 min read

South African car owners who may have downgraded their car insurance policies from comprehensive cover to third party fire and theft, or third party only during the pandemic, need to ensure that they have the right cover for their vehicles in place. Traffic volumes are returning to pre-pandemic levels, resulting in increased car accidents and incidences of crime involving motor vehicles.

Dr Hardy Ncube, Head of Personal Products at Standard Bank Insurance says the bank’s insurance arm noted a decline in accident-related vehicle claims during lockdown levels 5 and 4 but saw a higher volume of claims as the lockdown levels moved up and mobility increased on the roads. “Claim volumes are peaking at similar levels to what we saw pre-lockdown in March 2020,” Dr Ncube says.

South African vehicle owners may not want to consider the possibility of accidents or crime while they are returning to normal life and undertaking more business and leisure activities outside of their homes and communities. But the good news is that taking out the right personalised vehicle insurance cover will provide motorists with peace of mind and boost their confidence on the road.

In addition, there is currently more flexibility and innovation around car insurance cover than when many motorists first took out their car insurance policies years ago. Insurance providers like Standard Bank take a more tailored approach to provide vehicle owners with the car insurance they really need, compared to the one-size-fits-all offerings of the past. Standard Bank Insurance offers insurance premium and cashback benefits for good driver behaviour, this is determined by taking and passing the driving test.

“It is important to consider an individual’s needs because each person’s circumstances are different,” says Dr Ncube. “The best place to start is to determine what type of cover a motorist requires by considering the risks they face, such as accidents, theft or hijacking.

“Once a car owner has selected comprehensive, third party only or total loss insurance cover, they need to consider factors such as who will drive their car, what their vehicle’s security arrangements are, whether the car is used for personal or business purposes and if it was fitted with high-value extras after it left the factory.”

Inflation on car parts and labour costs and increased incidence of traffic accidents drive premiums up

Premiums are affected by inflation as insurance-related costs like repair costs, including parts, paint, and labour, as well as costs associated with claims such as car hire and storage costs and exchange rate movements.

“Although insurance may be a grudge purchase for some motorists and the first cost that consumers cut when they feel financial pressure, this is not a wise decision,” says Dr Ncube. “Consider how integral cars are to our lives in South Africa and the financial setback you would suffer if you lost your car. Cancelling your insurance policy can leave you worse off.”

“Besides the increasing weather-related events such as hailstorms and often poor driving behaviour by some motorists, insurance becomes a necessity. It is important for motorists to understand that it is not financially sound to pay for the cost of repairs to their vehicles through their savings, credit cards or personal loans in the event of an accident. Insurance offers them financial certainty.” 

Dr Ncube advises the best course of action for car owners who want to save money is to discuss their circumstances with their insurers or brokers to establish if their policies can be changed to lower their premiums.

“Appropriate insurance products that are on the market allow customers to customise their insurance requirements by choosing what they need and what they can afford. Motorists may also view their car insurance more positively when they select insurance cover that includes the optional use of technologies, like telematics, that monitor driver behaviour, rewarding them for good or less driving.

“The right insurance option can come at a better price and incentivise you to keep safe on hazardous roads.”

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