By TKay Nthebe
Insurance always seems like an unnecessary expense for most people; well at least until an ‘eish moment’ happens. An ‘eish moment’ can be anything from a car accident, burst geyser or accidental loss of your most valuable possession, leaving you in financial ruin should you not be covered. In a recent conversation with some colleagues, I’ve realised that many people do not fully understand the benefits and importance of insurance. In this week’s article I will focus on car insurance.
Imagine driving down Mpilo Boulevard with your Peugeot 207 on your way to work and suddenly crashing into a BMW M4. Worse still, is if you do not have car insurance or are covered for third party damage. The damage of such an accident and the cost to repair can easily run from as little as LSL50,000 to LSL400,000 which can negatively affect your finances, especially if you do not have this amount of money readily available. Besides the inconvenience of not having a car to take care of your daily errands, imagine the cost of repairing the BMW M4 that you’ve crashed into?
Why do you need car insurance?
The purpose of car insurance is to protect you against financial loss as a result of accidental damage, theft and malicious damage. By paying a premium (paid annually, quarterly or monthly) the risk is transferred to an insurance company that will pay out or indemnify you should there be an accident, your car gets stolen or is maliciously damaged. The benefit of having insurance is to minimise the financial blow that could affect your financial position whether you are driving a Japanese or South African import.
It is also important to understand the different car insurance covers available e.g. Comprehensive, third party, fire and theft and third party only. A comprehensive car insurance for example provides the highest level of cover. The benefits include third party cover should you crash into the BMW M4, towing services and courtesy car cover (if applied for). If the car is financed via instalment sale agreements, there is also credit shortfall benefit that helps close the gap between the car’s market value and outstanding loan about. Take away the stress, pay your insurance premium and transfer the risk. By so doing, you will avoid the financial loss that could potentially leave you in financial ruin or set you back financially. Having insurance is an important part of your financial plan, so speak to your Insurance broker, take care of your insurance needs and ensure you have peace of mind this Worker’s Day.