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Cross Country Drive

In these uncertain times, don’t risk your vehicle

Words & Picture by Jacqui Ikin

Typically, when you are experiencing financially trying times, you look at ways to decrease or eliminate expenses. In the time of the Covid-19 lockdown, this ranges from cutting down on luxuries and ready-made meals, all the way through to reassessing more serious expenses like car insurance. But before you consider cancelling your policy, let’s asses the situation and review some of the inherent risks and disadvantages, because as we know, there are very few simple answers in life. There are more potential consequences (immediate and long-term) than you may have originally thought…

The safest and most suitable means of transport in these incredibly uncertain times is your private vehicle, which minimises the risk of cross-contamination by ensuring that social distancing guidelines are upheld.  Even though you are likely staying at home, and using your vehicle far less frequently than usual, it is important that it is used responsibly and well protected. Whilst the current circumstances may seem daunting, you need to remember that this too shall come to an end. It is thus important to make strategic decisions that benefit you in the long term, so that when the situation returns to “normal”, you are not left with long term regrets and difficult implications.

The first point to consider is that you will be in breach of contract if your car is financed. In this country, you are required to hold a comprehensive car insurance policy for the duration of the payment period. The consequences of violating your financial agreement vary between institutions, but you could be at risk of losing your car altogether.

The second consideration is that you may need to use your vehicle for an emergency, or to collect essential supplies, or to help an elderly parent… If something were to happen during this short trip, you would not be covered. Many of our clients engage in adventure travel, crossing deserts, rivers and traversing thousands of kilometres of rough African roads. As such, the risk of an accident in suburbia just a few kms from home seems remote. However, general statistics from around the world indicate otherwise, confirming that the vast majority of accidents happen within a short distance from home.

The definition of an ‘accident’ is “an unfortunate incident that happens unexpectedly and unintentionally, typically resulting in damage or injury”. We’d like to believe that the vast majority of our clients are good, careful drivers. That said, the possibility of someone else causing the accident looms large. To add insult to potential injury, approximately 70% of vehicles on South Africa’s roads are not insured. If you are involved in an accident, you only have a three in ten chance of it being with someone who is insured and thus able to cover any damages. This could leave you badly exposed financially, and possibly legally as well. In addition, the AA estimates that up to 800 000 vehicles in South Africa are either unregistered or classified as unroadworthy. These vehicles pose an even larger threat because they are unsafe – if you were to be involved in an accident with one of these vehicles, who is going to foot the bill if you have cancelled your insurance?

If you happen to be the cause of an accident, and you have no insurance, you are obligated to repair / replace the other vehicle right away (not to mention your own!) – even if you do not have the money. Their insurance will make sure that the money is recouped – one way or another. This could result in costly lawsuits, with the overall bill easily running into hundreds of thousands of Rands. If you’re unfortunate enough to damage a luxury, high-end vehicle, this could even result in you losing your home during the process of repairing that vehicle! You would also be liable for injuries sustained by the other party, which could run into millions. If both parties are insured, as a rule neither party has to pay anything except the excess.

After you have taken care of the other party’s vehicle / injuries, you are left with the dilemma of your own vehicle which you would need to replace / repair, or find an alternative means of transport. This could be financially crippling. Furthermore, public transport is not ideal during the Covid-19 lockdown. If you rely on your vehicle to earn a living, your will be in a double bind!

The South African statistics for hijackings and theft are another motivation to keep your vehicle insured. The numbers may be down during this period (too soon for reliable stats yet), but the risk is by no means gone.

Beyond all of the good reasons above, going forward uninsured drivers also will likely have trouble finding cheap car insurance rates when they shop for a policy. If you cancel your policies frequently, you may also end up falling into a higher risk category, which could ultimately result in higher premiums (or even cause some insurance companies to refuse your applications) in the future.

Cancelling your car insurance is a little like playing Russian roulette… Just don’t do it. It is a quick fix that comes with enormous risks. These challenging and disturbing times will ultimately end, and you need to ensure that decisions you are taking now, in the midst of this crisis, don’t have significant long-term impacts.

Cross Country Insurance Consultants is a versatile, flexible service provider, here to serve you and keep your assets safe in these troubled times. If you are experiencing financial difficulties pertaining to the payment of your premium, please feel free to contact us for a conversation to ascertain how we can best assist you?

Whilst our catchphrase “Take us with you” seems less far reaching than ever before, we believe that we are with you all the way… which includes staying at home. We have no doubt that we will all be out and about, enjoying all this great country has to offer, in no time at all 😉.

#SAWillTravelAgain #StayAtHome #BeSafe

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