A hazard can be defined as anything such as a situation, condition, operation, activity or substance that increases the likelihood of an accident or loss taking place and it can also have an influence on the size of the loss. In insurance, including car insurance, we can come across both physical and moral hazards.
In insurance terms we also refer to a risk as a peril and define that as the source or cause of a loss. Here we can think of examples such as a fire or storm. A hazard is the condition that may create or increase the severity of a loss resulting from the given peril. Faulty wiring is a hazard as it increases the likelihood of a fire taking place and resulting in a loss.
Physical or tangible hazards arise from the physical characteristics of the object. Weather patterns, the construction of a building, pollution, chemical properties and industrial processes can all pose as physical hazards.
Moral hazards stem from the personal characteristics of the insured such as dishonesty, lack of integrity or carelessness. A moral hazard is the risk that an insured may attempt to take an unfair advantage because of the existence of insurance, for example by submitting a false claim.
A high-risk occupation is a job or profession where, through the nature of the work, there is a higher risk to have a serious accident. Examples of high-risk occupations would be those in the defence force and police; demolition work; labour organizations; mining and security companies. Certain professional sports are also classified as high-risk, as well as journalism and people in the entertainment industry.
People in high-risk occupations will pay much higher rates for life and disability insurance. Usually the type of job you do will not have a significant effect on your car insurance premiums, unless you are a professional racing driver. If you do fall into a high-risk occupation group and use your car for business you will pay more for insurance.
The reasoning behind some occupations being classed a high insurance risk is based on factors such as driving at night, or under time pressure. Any car used for business purposes must be insured under a business category in any case and the premiums are higher than for private use.
A professional service provider such as a medical practitioner or architect can pay up the 30% more for comprehensive car insurance than the salary worker. This has now been acknowledged as unfair by some insurance companies who now charge the same rate.
The term Hit and Run is used when one car collides with another car and the driver leaves the scene of the accident without stopping to give assistance or provide any information on how the accident happened. The same term is also used if the driver hit an object or pedestrian without stopping. Many people have had the unfortunate incident of someone hitting their stationary car in a parking garage or elsewhere without having the decency to leave their contact details. In South Africa where we have a huge percentage of drivers without car insurance the incidence of Hit and Run has also increased.
Leaving the scene of an accident is a criminal offence. We have a legal and moral duty to stop at an accident scene and provide assistance. Take photos with your cell phone if you can. What do you do when you are at the receiving end of a hit and run? First – if at all possible – try to memorize the details of the car (if the accident happens while you are present.) Secondly, report this to the police as soon as possible, giving as much detail as you can remember. Thirdly, advise your own Insurance Company of the accident, giving all the details, including the police case number. Hopefully you have comprehensive insurance that will cover hit and run accident damage. Most insurance companies’ policies do not use the actual wording “hit and run” but all comprehensive insurance contracts will provide cover whether you or someone else was the guilty driver.
