THE following in general details are the main covers under a Comprehensive Motor Insurance Policy and a bit about what some terms mean.
Comprehensive motor cover
This policy generally covers all sudden, physical and accidental loss to the insured vehicle, subject to the terms conditions and exclusions of the policy. The following are some basic aspects of a comprehensive motor insurance policy:-
a) Insurance premium
This is the amount you will have to pay to obtain this insurance cover. The premium is made up of the following:-
· Company premium — this is the amount that the insurance company retains
· Value Added Tax
· Stamp Duty
Value Added Tax and Stamp Duty are government levies and are paid out to government
Factors that influence the amount of premium that insurance companies charge for premiums include:
· The type and age of the vehicle
· Where the vehicles is to be kept when not in use
· The loss history of the person seeking insurance
b) Sum Insured
In other words, the value that the vehicle is insured for. It is important that you always insure on the “market value” of the vehicle.
c) Basis of claim settlements
Where vehicles are deemed to be beyond economical repair or where they have been written-off, the settlement is based on the market value of the vehicle, limited by the sum insured.
d) The policy excess
This is the amount that a customer pays is a claim is to be made. Most if not all insurers also provide for an age excess where an additional amount is also paid depending on the page of the driver and his driving experience. The amount of excess to be paid would be detailed in your insurance documents.
Most insurance companies will accept to decrease your Standard Policy Excess in return for an increase in premium (ie the cost of purchasing an Insurance Policy), so it is important that you aware of this and query this with your insurer.
The Excess is a contractual obligation that does not factor, into the issue of ‘fault’. Whether you are at fault or not, one is at fault not the excess will still be required to be paid.
There is a special windscreen excess applicable and this is normally much less than the standard policy excess and applies to situations where there is damage to any of the windshields on the vehicle without any accompanying damage to other parts of the vehicle.
Policies may differ depending on which insurer you decide to insure with. When such a claim is made only the windscreen excess will apply.
e) Third part property damage
In addition to insuring your vehicle against loss or damage, most insurers will also cover your liability for damage to other peoples property arising out of the use of the insured vehicle.
The value of the cover is usually limited and this limit would vary from one insurer to the next.
f) Passenger risk liability
Most policies will also extend to automatically provide cover for injury/death to passengers in the subject vehicle with the exception of relatives and friends of the vehicle owner who normally reside with the vehicle owner. The value of the cover is usually limited and this limit would vary from one insurer to the next.
g) Exclusions of the policy
Policy exclusions describe what coverage limits exist or how coverage may be eliminated depending on how a loss occurs.
Basically what you’re ‘not covered for’. It is strongly recommended that you read through this section of the policy thoroughly and ask questions if you are not sure of anything.
h) Policy conditions
This tells you what the Insurer’s responsibilities are and what your responsibilities are as the customer. This includes how to cancel a policy, subrogation and payments plans.
i) Your duty of disclosure
You are required to disclose all material facts to an Insurance company. A material fact is one that would influence an insurer to either:
· Charge a higher premium
· Decline to provide cover
Your duty of closure is applicable when you are you are first taking out your policy and for each subsequent renewal.