There are many stories and myths about car insurance. Do you know which of these statements are true or not?
There are various myths about car insurance that consumers must beware of because believing a myth can come back to bite you when your car is damaged or stolen and you have to replace or fix the car out of your own pocket.
True or false? If you have a bottle opener on your car’s keyring and you are involved in an accident, your insurance will not pay out. This is false, says Wynand van Vuuren, client experience partner at insurer King Price.
“If you were drinking and you are over the legal blood alcohol limit, you could have a problem. But your insurance claims are not affected by how you decorate your car keys.”
Van Vuuren says there are a lot of weird myths and perceptions out there about insurance and they often put people off from taking out insurance in the first place, which is a really bad move, considering that seven out of every 10 cars on our roads are not covered.
He shared some more popular myths:
Myth: If your airbags deploy, your car will be written off
Fact: Your airbags do not determine whether your car can be repaired. That decision is made based purely on whether it is economically viable to repair the car.
“When assessing a claim, a range of factors is considered, including the availability of parts, your car’s age and condition and its retail value. But deployed airbags alone do not mean an automatic write-off,” says Van Vuuren.
Myth: If your financed car is stolen or written-off then you do not have to pay back what you still owe
Fact: You remain responsible to the financer for the full financed amount, plus the applicable interest and any extra charges, whether or not you still have the car. This is why it is compulsory to have comprehensive insurance when you finance a car.
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Myth: With credit shortfall coverage you can buy a new car if yours is stolen or written-off
Fact: Credit shortfall cover pays what you still owe the financer after your claim is settled. In other words, it covers the difference between the settlement amount at the time of your car being written off or stolen and what you still owe the financial institution for it.
Van Vuuren warns that credit shortfall coverage is not automatically included in your policy. You must ask your insurer to add credit shortfall cover and you will pay an additional premium for it. Some terms and conditions will apply, but it is a small extra cost for big peace of mind.
Myth: I do not drive that much, so I don’t need insurance
Fact: This is a popular, but financially damaging myth. If someone jumps the stop sign at the end of your road and hits your car, will you be able to cover the financial loss? If not, you need insurance. And remember that insurance does not just protect you while you are on the road.
“Your car is still vulnerable to fire, theft and weather-related risks while on your own property. Also, having insurance means you are covered for your liability towards other people’s cars and property as a result of an accident. Keeping your car insured will ensure you always have peace of mind.”
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Myth: Anybody can drive my car at any time
Fact: When doing a quote, your insurer will always ask who the regular driver of a car is and by this they mean who drives the car most often in any monthly period. When you tell your insurer you are the regular driver, it bases your premium on your specific risk profile.
Therefore, if you tell your insurer that you are the regular driver but your student child drives the car most of the time, you effectively supplied your insurer with incorrect information and this could lead to a claim being rejected.
Van Vuuren says the bottom line is to ensure that your policy always reflects your correct and complete information so that there is no confusion or unnecessary delay if you need to claim.
“And do not listen to the myths. Get the facts and stay safe and covered.”