You do not have a choice when deciding whether you need or do not need car insurance. It’s mandatory, and when caught without it, citizens are in deep trouble. So obviously you must take out a policy. But which policy you ask?
The only decision a car owner is allowed to make when deciding on car insurance, is the extent of coverage he or she wishes to purchase. There are two primary types of car insurance. First, you have standard car insurance which all vehicles must remain covered under. However you can expand your plan to cover compulsory insurance where not only your vehicle, but other people and vehicles are covered in the case of an accident.
Compulsory insurance factors in driving age and experience before anything else, which makes for very high premiums for young adults just starting out on the road. Unfortunately, there is little you can do to alter this high premium for your children.
What you can do stress the importance of safe and defensive driving to your children. Tell them to avoid distractions and keep their eyes fixed on the road in front of them. If they do that, there premium will slowly progress in dollar signs as the years progress.
If the parent wants to further their children’s insurance coverage than signing up for third party insurance is a terrific idea. Chances are your son or daughter will make a few mistakes when they first start out driving alone. Hopefully these mistakes will not result in harm to your children or others. Third party insurance covers accidents involving the sole car of the driver.
The higher your deductible, the lower your annual insurance premium will be. You can further increase the reduction in insurance costs by avoiding accidents. For example, every year you avoid an accident, the insurance company awards third party clients with a “no claims” bonus. The bonus will reduce the premium for the following year and continue to reduce the premium every year the driver avoids an accident.
The most popular form of car insurance, known as comprehensive insurance, covers the damages to vehicles in the accident as well as theft situations. The insurance is calculated based on the value of the vehicle, the age of the driver, age and condition of the vehicle, where it’s parked, as well as the strength of the security or lack thereof.
Graham McKenzie is the content Syndication Manager at Insurance123.co.za South Africans leading car insurance information portal
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