There are a number of factors you need to be cognisant of when insuring your motor vehicle and, once insured, renewing your policy.
It is a no-brainer as to whether insurance is required or not, if you don’t have insurance and you are involved in an accident in which you are liable and the other party owns an expensive car, you will end up paying out a significant sum of money in reparation from your own funds. At the very least it is recommended that you insure your motor vehicle for third party accidents, fire and theft. That way you are covered if you are at fault in an accident or your car is stolen or burnt out.
If you own a modified, custom or performance motor vehicle insurance companies are less likely to accept your application. The definition of ‘modification’ can be very broad so that it encompasses any difference, howsoever minor, from the manufacturer’s model. Mag wheels are clear modifications but something as insignificant as a different steering wheel or gauges may also be. Once you have found an insurer, it is particularly important to disclose anything and everything to the company in terms of the modifications that exist, and even though the premiums will be higher, failure to do so may well end up in the policy being voided.
If your son/daughter drives your car and they are under twenty-five (25) this also needs to be disclosed. Again, the premiums will be hiked up because of the perceived risks an inexperienced driver poses on the road, but if an accident occurs and your son/daughter is at the wheel the policy will be of no use.
Another simple way to void your policy is to drive in contradiction of it terms: for example, breaking the speed limit; driving under the influence of drugs or alcohol; driving carelessly or dangerously and driving outside the limits of your licence. When your son or daughter borrows the car from you, it would be wise to make sure they are not going to send text messages / check their facebook news feed or apply make-up whilst at the lights.
Owning a motor vehicle is an easy way to lose money too, it is very important to check your policy renewal terms every year. Typically your insurance company will nominate an ‘agreed value’ of your motor vehicle that you may overlook. Typically the ‘agreed value’ dramatically reduces every year and often does not reflect the true market value of your car. This may have the effect of keeping your premiums at a reasonable rate, however, if you’ve bought, for example, a Ford Explorer for $25,000.00 three years ago and the ‘agreed value’ is reduced to say $16,000.00, the reality is that if the vehicle is in an accident and written off the amount of your payout is simply not enough to replace what you had.
There are a number of ways to reduce your premiums, for instance: store your vehicle in a garage; drive a modest car that is less likely to be a target for thieves; nominate an increased excess; do not modify it or take a package deal for insurance of other items (such as house and contents).