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Motor Insurance
Sunday, October 1, 2006
Vesa ways

Everybody wants fully comprehensive vehicle insurance, but not everyone can afford it and still have a low enough excess. Allen Harington, chairman of the Vehicle Security Association of South Africa (VESA), has a few ideas about how to lower the cost of insurance and still get the best possible cover.

For one thing good vehicle security systems over and above the necessary can save you hundreds of rand each month on your insurance premiums. Most private motorists have vehicle insurance because, for a smaller, regular fee, it covers them against a significant loss they could otherwise not afford.
But what insurers pay if your car is stolen, depending on your particular contract, is either the vehicle’s market value or its retail value. Most pay market value, which is an average between the price you pay for the vehicle and what a second-hand car dealer would give you. Retail value is what you would pay for the vehicle, and subsequently a greater amount.
Paying less insurance generally results in a poorer service from the insurance company. That’s not what you want to hear if your car has been stolen or hijacked. You need it replaced quickly and efficiently so that you can keep on driving.
Although the likelihood that your car will be stolen or hijacked is being reduced through effective security and policing, the possibility remains. Police statistics from Business Against Crime show that car theft has been steadily reduced, from 105 867 incidents in 1994/1995 down to 83 857 in 2004/2005. Business Against Crime says that one syndicate in the Western Cape alone was taking 1 200 cars per month at an average R45 000 value.
But the figures are not the final word on accurate numbers. According to the Institute for Security Studies, reported on www.sagoodnews.com, a survey of 5 000 South Africans in 2003 states, among others, that 36% of people whose cars were broken into did not report the incident to the police. That means more cars are likely stolen than SAPS figures can show.
Of the reported cars stolen, Business Against Crime states that only 40% are recovered. In turn, only 40% of those recovered can be identified and returned to their owners. The remaining 60% of that number must be compacted or used by the State; as for 53% of those not recovered are re-registered, 30% are exported and 17% are chopped up for spares.

Three types of cover

Protecting South Africans from these statistics are three basic types of insurance cover, depending on their needs and affordability: fully comprehensive; third party, fire and theft, and balance of third party.
The actual cover ranges respectively from all damage and loss of the car to theft of your car and finally not for theft at all, just damage to the other car or cars if you have an accident.
Prices for each vary quite significantly based on the driver’s age, vehicle age, environment when parked at night, parked during the day and most importantly, and the factor over which owners have the most control, security devices fitted to the car.
Most insurance companies demand a vehicle tracking system be fitted as standard if they are to offer fully comprehensive insurance. Alarms are almost standard on all cars. Immobilisers definitely are, particularly on new cars. Gearlocks are not. Nor are steering wheel locks. Ditto micro-dots.
While the rest are almost self-explanatory in a high-crime society like South Africa, micro-dots are microscopic dots that have either the vehicle’s VIN or a unique PIN printed on them. Up to 10 000 are then sprayed onto the car. The best part is that they’re invisible to the naked eye and they really help to reduce that 60% of recovered vehicles whose owners cannot be found. That’s why the insurance companies love them.
And that’s why they will help to reduce your insurance premiums. Indeed, all of these security options can help to reduce your insurance premiums. 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.

About VESA

The Motor Vehicle Security Association of South Africa (VESA) is a non-profit organisation that regulates the vehicle security industry. It was established in 1987 and has gained a membership base of 1 027 installer members and 101 equipment supplier members and has approved 937 products.
VESA protects the interests of insurers and the general public from being misled by unscrupulous businesses offering inferior services and products for vehicle security.
Consumers have the right to be protected from unfair business practices, poor quality of service and harmful or inferior products. Dealers are only accredited following the most stringent testing; VESA-accredited dealers are properly trained and fitment procedure integrity is constantly monitored.
The standards set by VESA consist of elements set by the South African Bureau of Standards (SABS) as well as vehicle security industry affiliates. Recognising VESA’s success in combating crime, the organisation has been appointed as the official vehicle security standards-generating body by Standards South Africa (StanSA), previously the SABS.
During its lifespan VESA has established ties with insurance companies, the National Crime Prevention Office of the SAPS, and Business Against Crime to combat vehicle-related crimes.
The association’s activities are controlled by sub-committees, categorised according to the markets they serve:
1. Mechanical for gearlocks;
2. Electronic for alarms and immobilisers;
3. Telematics for fleet management and stolen vehicle recovery;
4. Vehicle identification; and,
5. Installation centre for installers.

The association is the largest in the industry, with more than 550 members and is also the oldest, having been established in 1987. It has issued more than 1 million certificates in support of its members’ work.

Copyright © Insurance Times and Investments® Vol:19.5 1st October, 2006
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