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Motor Insurance
Friday, December 1, 2006
Vesa ways

Everybody wants fully comprehensive vehicle insurance, but not everyone can afford it and still have a low enough excess.

There are three basic types of motor insurance. ‘Full comprehensive’ is the most expensive and provides the widest scope of cover; third party, fire and theft, is cheaper, by obviously reducing the scope of cover mainly to exclude own damage; and the cheapest, ‘balance of third party’. This last only insures ‘third parties’ and other vehicles, not yours.
Despite the cost most private motorists who have vehicle insurance (only about 40% of all registered vehicles are insured) buy comprehensive cover. This is often a condition of financing of the initial purchase.
Premiums vary considerably depending on age of the driver, insurance claims record to date, the type and year of the vehicle insured, nature of the environment (for example, city or farming area), and where parked at night, amongst several other factors.
The insured generally has little control over many of these risk variables. However, one factor over which owners have the most control concerns the security devices fitted to the car. This can reduce the cost of comprehensive insurance significantly. As Allen Harington, chairman of the Vehicle Security Association of South Africa (VESA), notes, “Good vehicle security systems over and above the necessary can save you hundreds of rand each month on your insurance premiums.”
He says that most insurance companies require a vehicle tracking system to be fitted as standard if they are to offer fully comprehensive insurance on new vehicles. Some require it above a certain indemnified value, for example, for any car worth more than R150 000, new or used. Alarms are mostly standard factory-fitted to all motor vehicles these days, as are immobilisers. However, relatively few cars are fitted with gearlocks or steering wheel locks, or have the new micro-dot technology, he says.
Micro-dots are simply microscopic dots that have either the vehicle’s VIN or a unique PIN printed on them. Invisible to the naked eye, as many as 10 000 micro-dots are sprayed on a given car. This technology improves the ability to identify the true owner of a recovered stolen vehicle, and therefore reduce the overall insurance claims costs.
As such, Mr Harington believes they can help to reduce your premiums. “Indeed, all of these security options can help to reduce your insurance costs. All you need to do is shop around and find the best rates. Also, determine which devices attract the best rate reductions with your insurance company of choice.”

Some statistics
Vehicle population (2005) 7 535 857*
*includes 805 050 trailers.
Thefts and hijack rate 12.9 per 1 000
Unroadworthy vehicles (2006) 209 198
Unlicensed vehicles (2005) 362 420
Fraudulent driver’s licences 24 243

Copyright © Insurance Times and Investments® Vol:19.6 1st December, 2006
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