- If your airbags deploy, your car will be written off
- If your financed car is stolen or written off, then you don’t have to pay back what’s still owing on it
- Having credit shortfall means you can buy a new car if yours is stolen or written off
- If I don’t drive that much, I don’t need insurance
- Anybody can drive my car at any time
Car insurance can be tricky to understand with many myths about the industry taken as fact, and vice versa.
King Price has therefore highlighted the five most common misunderstandings about car insurance, and what the rules behind them really mean.
If your airbags deploy, your car will be written off
Airbags don’t determine whether a car is repairable or not. This is a decision based purely on whether it’s economically viable to repair.
“When assessing a claim, a range of factors is taken into consideration, including the availability of parts, your car’s age and condition, and its retail value,” said Wynand van Vuuren, King Price client experience partner.
“But, deployed airbags alone don’t mean an automatic write-off.”
If your financed car is stolen or written off, then you don’t have to pay back what’s still owing on it
Regardless of whether you still have your car or its state of driveability, you as the vehicle owner remain responsible to the financer for the full financed amount, plus the applicable interest and any extra charges, in the event that it is stolen or written off.
This is why it’s compulsory to have comprehensive insurance when you finance a car, according to Van Vuuren.
Having credit shortfall means you can buy a new car if yours is stolen or written off
Credit shortfall cover pays what you still owe the financer after your insurer settles a claim.
“In other words, it covers the difference between the settlement amount at the time of your car being written off or stolen, and what you still owe the financial institution for it,” said Van Vuuren.
Credit shortfall isn’t automatically included in an insurance policy, however. It is an add-on with its own terms and conditions that will necessitate an additional monthly premium on top of what the standard cover already costs.
If I don’t drive that much, I don’t need insurance
No matter how often you drive, if you don’t have the finances available to repair a small fender bender, which can easily cost tens of thousands of rands depending on the vehicle you own, insurance is a must-have.
Insurance doesn’t just protect you while you’re on the road, either, as your car remains vulnerable to fire, theft, and weather-related risks while on your own property even if it hasn’t moved in months.
“Also, having insurance means you’re covered for your liability towards other people’s cars and property as a result of an accident,” said Van Vuuren.
Anybody can drive my car at any time
When doing a quote, your insurer will always ask who the regular driver of a car is, and by this, it means who drives the car most often in any monthly period.
“When you tell your insurer you’re the regular driver, they base your premium on your specific risk profile,” said Van Vuuren.
“So, if you tell your insurer that you’re the regular driver but your student child drives the car most of the time, you’ve effectively supplied your insurer with incorrect information, and this could lead to a claim being rejected.”
Keyword: 5 car insurance “facts” that are false