Malicious damage is damage that is the direct result from the deliberate or wilful act of someone whose clear intention (plan or purpose) was to cause this damage. An example of malicious damage to your car can be someone deliberately scratching the paintwork on your car with a sharp object. Insurance cover against malicious damage can be taken out in the form of an extension to your normal car insurance policy.
Some policies such as executive car or vintage car insurance automatically includes malicious damage cover, think of the price of damage that can be caused to a soft top vintage car. In South Africa SASRIA cover, which is normally included in car insurance policies will cover malicious damage that is the result of political, riot and strike action, but it does not cover malicious damage falling outside the SASRIA definition. The term malicious damage also excludes the damage caused by the theft or attempted theft of a car. Malicious damage caused during an attempt or the actual theft of a car is covered under theft.
Do not take for granted that your policy includes malicious damage cover, check your policy and ask your broker or insurance company about this extension if you feel that you need this additional cover.
Market value is sometimes referred to as “fair” value. It can be described as the price an item can be sold or bought for between an agreeable (willing) and knowledgeable buyer and seller in an open market transaction. It is the current value of an item, if it were to be replaced by an identical item, being of similar age and wear and tear. Note that we are dealing with the value at a specific time – the time the loss took place.
Market Value is very important when dealing with car insurance. We look at three different values:
- Retail Value: Refers to the price a car dealer might be able to sell the car for.
- Trade Value: Refers to the price a dealer might pay you should he buy the car from you.
- Market Value: Is halfway between the Retail and Trade Values.
Most insurance companies will only insure your car for its current market value. If they are prepared to insure at retail value, you will pay a higher premium. Because the market value of a car is continually declining you should be paying less insurance on your car every year (bearing in mind the effect of inflation on insurance premiums.) Ensure that you request your insurer to reduce the insurance value of your car annually. The Auto Dealers Guide is a good tool to use when determining your car’s market value.
The term material damage is often used in property-related insurance such as car insurance. The reason why you take out car insurance is because the car, as your property, has a specific monetary value. Any damage or loss of the car will result in a monetary loss to yourself and it is this risk that you take out car insurance against. If no material damage took place you will have no claim against your car insurance.
The term material damage will always refer to physical property, it is something you can see and touch. In car insurance reference is also made to different classes of insurance such as fire, theft and accident for example. Whether your car is damaged or destroyed in a fire, or damaged or written off in an accident, material damage will be suffered.
Should you take out third party insurance only you will have no cover against any material damage suffered to your own car, it will only cover you against the claims of the third party in case of an accident. If you take out third party, fire and theft cover, your own car is covered for fire damage or theft but not for any material damage caused to your own car. The only way to ensure that material damage to your own and third party cars is covered is to take out full comprehensive car insurance.
Mediation is one of the alternative processes available to settle disputes outside the courts. Court procedures can be very expensive and it can take months or years for a case to come before the court. It is in the best interest for both parties to first try the other alternatives which are available. A mediator will try to settle a problem between two parties by facilitating a meeting between the parties where he would try to get them to reach a settlement.
A mediator does not have the powers of a judge, he cannot make any decision which either party must accept. He will listen to both parties and try to get them to come to an agreement. Mediation differs from arbitration. With arbitration the arbitrator has the right to make a decision that will be binding on both parties.
In the case of a dispute between an insurer and the insured, including car insurance disputes of settlement, the insured can request mediation or arbitration as an alternative to reach a settlement.
The ombudsman for short-term insurance can also be contacted for assistance, many cases brought to his office are settled through mediation and conciliation without him having to make a formal determination.
Medical Cover is most commonly seen as medical aid cover or insurance. In our glossary we are referring to the actual medical cover included in your car insurance. All car insurance policies will have some form of medical cover included in the policy. It is important for all insured parties to check what medical cover they enjoy with their car insurance and not to take anything for granted. Whatever is stipulated in your policy is the amount or type of cover that you will receive. If your car is involved in an accident any injured person will receive a maximum amount of cover, often not more than R500.
If you take out Comprehensive Insurance, you will enjoy the benefits of a package of medical assistance benefits (not to be confused with medical cover as described above.) These benefits may include the following:
- Emergency telephonic assistance
- Emergency response – either by road or air ambulance at the accident scene
- Transfer by road or air to the best suited hospital or other medical facility
- Life saving medication or blood transfers
- Care for stranded children will be organized
- Transport back home of terminally ill patients if hospitalized far from home
- Repatriation of mortal remains
- Access to specialized sexual assault crisis centres.
Today, with modern interfaces such as the Internet, buying car insurance is very different compared to twenty years ago. There are indeed a number of ways in which you can purchase car insurance, some of these methods are specifically geared towards convenience and saving you time; while allowing you to gain as much information as you need to feel comfortable with , ensuring you are buying the right car insurance product.
- Today you can choose to contact the insurer of your choice directly via telephone and buy your insurance telephonically.
- You also have the choice of dealing with an agent working exclusively for a specific insurance company. The agent will call on you at your convenience to discuss your insurance needs. Insurance companies use call centres to fulfil this role.
- An Insurance Broker represents a number of insurance companies and will contact them to see which offer is most suited to your needs.
- The modern way of buying car insurance is to do so via the Internet. The benefits are that you can obtain information and quotes about a number of insurance companies and compare quotes before you make a decision. All the major insurance companies have websites where you can get information and buy insurance.
- Aggregate websites offer you the choice to obtain quotes from a number of insurers at the same time.
Remember to ensure that the company you deal with is licensed as a Financial Services Provider in terms of the FAIS act.
Today, with modern interfaces such as the Internet, buying car insurance is very different compared to twenty years ago. There are indeed a number of ways in which you can purchase car insurance, some of these methods are specifically geared towards convenience and saving you time; while allowing you to gain as much information as you need to feel comfortable with , ensuring you are buying the right car insurance product.
- Today you can choose to contact the insurer of your choice directly via telephone and buy your insurance telephonically.
- You also have the choice of dealing with an agent working exclusively for a specific insurance company. The agent will call on you at your convenience to discuss your insurance needs. Insurance companies use call centres to fulfil this role.
- An Insurance Broker represents a number of insurance companies and will contact them to see which offer is most suited to your needs.
- The modern way of buying car insurance is to do so via the Internet. The benefits are that you can obtain information and quotes about a number of insurance companies and compare quotes before you make a decision. All the major insurance companies have websites where you can get information and buy insurance.
- Aggregate websites offer you the choice to obtain quotes from a number of insurers at the same time.
Remember to ensure that the company you deal with is licensed as a Financial Services Provider in terms of the FAIS act.
Misrepresentation takes place when the party who applies for insurance cover provides written or verbal information to the insurance company that is untrue or misleading. Misrepresentation can also take place when an existing contract of insurance is due for renewal. The term material misrepresentation is used when an insurance applicant makes a false statement of any material (important) information. An example in car insurance will be where the application states that the car is kept in a locked garage overnight, meanwhile the car is parked outside in the street every night.
The above example is a deliberately false statement made by the applicant to obtain a cheaper insurance rate. Material facts have an impact on whether or not the insurer decides to agree to provide the insurance cover; or it may also impact on the terms and conditions of the policy.
Fraudulent misrepresentation will have involved the following: the party making the statement is well aware of the fact that the information is untrue; he deliberately makes the false statement to persuade the insurer to accept the contract; the insurer agrees to the insurance on the grounds of the false information.
Misrepresentation could also be innocent, however whether it is innocent or fraudulent misrepresentation – the insurance company has the right to repudiate (reject as invalid) the contract or reject a specific claim.
A modified car is one that had changes made to it that differs from the specifications of the original manufacturer. Modifications can include extra parts or replacement of the original parts. Cars are usually modified to increase the speed of the car such as replacing the original engine or tuning the engine and also replacing the wheels.
When you modify your car it is seen by car insurance companies as a non-standard car and you will no longer qualify for “normal” car insurance. Some car insurance companies will not even take on the risk of insuring a modified car. There are insurance companies that do insure modified cars but be prepared to pay more for your monthly car insurance than what you would pay for a non-modified car.
The main reason for the difference in insurance price is that the assumption is made that cars are modified to increase their speed. Speed equals higher risk – more accidents and more serious accidents – increasing the amount that will be paid out on one specific claim. Do not take the chance to try and insure your car without declaring the modifications you have made; you will be found out sooner or later. An assessor will investigate the damage after an accident or other claim and will soon discover the modifications. This will render your insurance null and void.
A modified car is one that had changes made to it that differs from the specifications of the original manufacturer. Modifications can include extra parts or replacement of the original parts. Cars are usually modified to increase the speed of the car such as replacing the original engine or tuning the engine and also replacing the wheels.
When you modify your car it is seen by car insurance companies as a non-standard car and you will no longer qualify for “normal” car insurance. Some car insurance companies will not even take on the risk of insuring a modified car. There are insurance companies that do insure modified cars but be prepared to pay more for your monthly car insurance than what you would pay for a non-modified car.
The main reason for the difference in insurance price is that the assumption is made that cars are modified to increase their speed. Speed equals higher risk – more accidents and more serious accidents – increasing the amount that will be paid out on one specific claim. Do not take the chance to try and insure your car without declaring the modifications you have made; you will be found out sooner or later. An assessor will investigate the damage after an accident or other claim and will soon discover the modifications. This will render your insurance null and void.
In short-term insurance, including car insurance, you can only insure a risk that can be calculated in monetary value. It is one of the basic principles of short-term insurance that the value of something must be measured in monetary terms. For example, your loved ones are very precious to you but you cannot attach a monetary value to their lives – herein lies one of the major differences between short-term and life insurance.
The specific monetary value of your car will play a large part in the calculation of your insurance premium – it is obvious that the bigger the monetary value of your car the bigger the monthly insurance premium will be. You cannot decide independently what the monetary value of your car should be; the insurance companies have guidelines such as the car dealer’s guide which they use to calculate the monetary value of your car for insurance purposes.
The value of your car is also not the only factor that will determine your car insurance premium. A number of other factors are taken into account such as your personal profile which includes your age, gender, job, the area where you live, if your car is mainly used for business or private travel and various security measures such as where you park your car at night and what anti-theft devices you have installed.
If you have more than one car and you insure them on the same policy, or on different policies with the same insurance company you may qualify for a special discount called a multi-car discount. It makes sense that a person would insure their cars with the same insurance company unless a better deal can be arranged for one of the cars with a different company.
Should one of your cars fall under a specialized category such as a vintage car you may have to deal with different insurance companies as not all insurers will offer car insurance on specialized categories such as vintage or sport cars. If however, you have more than one “ordinary” car you need to insure ask your insurer for a multi-car discount. If they do not offer such a discount you might want to do some investigation and find a car insurance company that will gladly give you a multi-car discount to obtain your business.
Also check with your insurance company if you will qualify for a discount on your private car if you also drive a business car that is insured by your company. This benefit is available at some car insurance companies.