When you sign up for insurance cover on your car, you take your insurer's commitment to cover you in the event of a loss or theft, in good faith. However, many people don’t realise that they too, have an obligation to the insurer-and that is, to be responsible and stick to the rules of the policy. The terms and conditions of the average policy do not exactly make for riveting reading but it is important to understand the do’s and don’ts that you have to comply with. You cannot use ignorance as an excuse when things go wrong because when you sign for a policy, you are asked to tick the box that says “I have agreed to the terms and conditions of this policy”.
So what are your obligations?
Here are the basic ground rules:
Maintain it! If you neglect to maintain your car and you allow your tyres to become as smooth as a set of race car slicks, or your brake pads to become as thin as rice paper, an accident while in this state of disrepair could cause your claim to go unpaid.
Policyholders are covered against a certain level of unintended negligence, but insurers are entitled to decline a claim if the policyholder’s behaviour is reckless or if their vehicle was not roadworthy when an accident occurred.
You must be cognizant of the actions you take that threaten the safety of your vehicle. So, if for example you leave your keys in your car while you nip in the corner café for milk and a Bar One, and you return to an empty parking bay-your insurer would conclude that reasonable steps were not taken to safeguard your car.
Coverage when lending out your car
Most policies cover you if the car is in the hands of another driver but some need to be informed. Insurance companies determine your premium based on the regular driver’s details; they take into account your age, driving ability and claims history. If you have a situation where you swap cars or lend out vehicles for extended periods, you should call your insurance company to add or change the nominated driver. Policies that do cater for multiple drivers usually have additional excess levied if another driver is involved in an accident with your vehicle. Check for exclusions on your cover. For example, if your car is covered for private use and a colleague borrows it to go and see some clients, there may be no cover for the vehicle if it sustains damage while the driver is on a business trip. Business use carries a premium loading and if you are paying the premium for private use, business use is excluded.
If you lend out your car, it is vitally important that you check that the driver has a valid driver’s licence. No licence, no cover.
If you move home and or change jobs you may need to inform your insurer. For example, if you were previously residing in a gated community and your car was locked in a garage, a move to the city where you park on the street would result in a different premium. Similarly, a change of job, from an office worker to a lift club operator would also result in a change of premium.
Many other things may affect your premium. Grab a cup of coffee, pull out your policies and read the rules.
The Hollard Insurance Company. Ltd (Reg No 1952/003004/06) is an authorised Financial Services Provider.
