5 Common car insurance myths and what they really mean

It's reasonably easy to misinterpret some of the details of your car insurance plan; and if you do, it could lead to some unwelcome surprises when you have to claim or pay your premiums. To help you better understand your car insurance, we've listed some common myths and misconceptions and debunked them for you.

1. The cheaper my premium, the more value for money I am getting.
   In the car insurance world, there are three main different types of cover. The first is Third Party cover which will pay out for damages to third parties when you are in an accident. For example, it would pay for another person's car if you crashed into it. This is the cheapest of the three types of cover, but it isn't highly comprehensive cover, so you would need to cover all the costs of repairing your own car.

   The second type of cover is Third Party, Fire and Theft cover, which, like its name suggests, will cover you for damage to third parties' property and damage to your own car due to fire, and theft. This cover can be much cheaper than comprehensive cover. However you would still have to cover all of your own vehicle repairs if you were involved in an accident.

   The final type is Comprehensive cover, which will cover you in all of the above cases and in the cases of accidental or other damage to your car. This is the type of cover which will pay for repairs to your car if you were in an accident or if hail cracked your windscreen, for instance. Comprehensive cover protects a much broader range of risks, and this means that you will have a higher premium.

   However, when considering the type of cover that best suits your lifestyle and if you are getting the best value for money, it is important to look at the core cover available, as well as all features, benefits, and optional rewards that will give will you additional peace-of-mind.

2. If I own a car but don't drive all that much, I don't need insurance.
   You may not be on-the-move that much - perhaps because you're currently working from home - but car insurance is not just designed to protect you while on the road. For instance, your car is still vulnerable to fire, theft and weather-related risks while on your own property. Thus, keeping your car insured will give you added peace-of-mind even when you're not driving on the roads.

   If you only drive your car occasionally, if you clock less than 250km per month you can still enjoy cash back on your car insurance premiums with the Discovery Insure Dynamic Distance Cash Back benefit which gives you up to 25% of your premium back every month for driving less.

3. Age is the most important factor determining my premium and my risk.
   Many people assume that age is the single factor that could send their premium through the roof. The assumption is that younger and elderly age groups attract a high premium. The reason behind this assumption is that younger people have less experience, while older people are more likely to have cognitive impairments. The truth is, age is one of several factors used to assess your risk profile, with the most important being driver behaviour risk

   At Discovery Insure, using our state-of-the-art technology from Vitality Drive to reward good driving behaviour, we have found that young drivers (below age 26) have a 24% better driving score than other young South African drivers. Young drivers on a Gold Vitality status have a 28.6% lower accident frequency than Bronze drivers in their 50's. These statistics go to show that young adults may not be as risky as they first appear. We have also found that our older drivers drive 28% better than the average driver. These individuals also drive less, which means that they have a lower accident risk. For this reason can reward these drivers with Vitality Drive 65+.

   Using these insights, we are able to tailor your car insurance plan based on your lifestyle and driving behaviour.

4. You always have to pay an excess, no matter what.
   Excess can be seen as the part of the claim you are responsible for, so as to receive your benefit. It can be confusing to know under which circumstance you will be required to pay excess and when your insurer will cover the costs if you are involved in an accident.

   However, if you have comprehensive insurance on the a Classic or Purple Plan at Discovery Insure, you will enjoy the 'no excess benefit' for hail, fire, theft, or accident claims if an insured third party caused the accident. With Discovery Insure, 'excess flexibility' is an embedded feature in every car insurance plan. That means you can choose the excess that suits you. You can even choose an excess of R0.

5. The more expensive my car, the more expensive it will be to insure.
   Although there is a considerable trend in this direction, it can often be cheaper to insure a more expensive car. This is because the cost of insurance is impacted more by the cost of repairs than by the cost of replacement. After all, you are more likely to get involved in a small accident than in a major accident. This leads to considerably more repairs than replacements for the average person.

   Repairs can be expensive if car parts have to be imported from overseas or are not otherwise readily available, or if the particular car is known to be involved in more accidents than usual (e.g. a car without ABS). Newer cars can also come with additional security systems which reduce the risk of theft. This can make some older cars much more expensive to insure than some brand new cars. So, next time you buy a car, you might think twice before assuming that your brand new car will be expensive to insure.

Make sure that you get the right kind of cover

There is a real risk that not understanding how car insurance works or what you are covered for could lead you to selecting the wrong type of cover. You could also have your claims delayed or even rejected which results in frustration and disappointment in your insurance plan.

So, when evaluating your car insurance plan, make sure that you seek clarity for any sections or terminology you may be unsure of, and check that your plan really does cover your risks. Fortunately, when it comes to Discovery Insure's offering, there is a full range of cover options to consider at every stage of your life. We also offer bespoke optional features to tailor your insurance cover to meet your specific needs. After all, life changes and the kind of cover you need will change too. If you don't feel confident selecting or interpreting insurance for yourself, contact your financial adviser to assist you.