OPINION: Insure the full value of your car – including all its extras

JOHANNESBURG – October was declared Transport Month in 2005 during a national transport lekgotla.

It’s used to raise awareness of the importance of transport to the economy and encourage participation by civil society and business, including the provision of a safer, more affordable, accessible and reliable transport system.

The month is also used to engage in extensive campaigns showcasing the progress achieved in various transport programmes and projects.

* Are you sure your car is fully insured? It’s crucially important to take the extras and accessories into consideration when declaring the value of your vehicle to your insurer.

* What constitutes “extras and accessories”? Any items fitted as “standard” to a vehicle model listed on the insurance schedule, whether permanent or removable, are referred to as extras or accessories. Some of these extras are fitted by the manufacturers, but many are fitted by approved installers after the vehicle leaves the factory.

Examples of these include tow bars, bull bars, sunroofs, navigation systems, tracking devices, wheels, music systems, leather seats, winches, off-road features, anti-theft devices, window treatments, canopies, and an almost endless list of added features that enhance the vehicle’s functional ability or aesthetic appeal. These extras can easily add 50percent of the value of your vehicle.

* Why should you include extras and accessories in your insurance policy? The danger of not insuring your vehicle for the correct amount is that you only realise you are inadequately insured when you put in a claim and are paid out less than you were expecting.

In addition, most consumers are not aware that in the event of the sum insured not including the value of the extras and accessories, you will be liable to pay the settlement difference.

However, determining exactly what your short-term insurer will pay out can be a minefield.

* How can you ensure that you are not under-insured? The best way to avoid under-valuing your vehicle is to provide your broker with all the necessary information about your vehicle. Advise your broker of all the features, extras and accessories that are not part of the base model – and remember, this is whether or not you asked for these extras to be added or if they were added by the previous owner or the dealership prior to purchase. Also remember to communicate any additional investments in enhancements to the vehicle after you purchased your policy.

If your vehicle has extras, go to a reputable dealer in your area for a valuation. Last, review the value of your vehicle, including all its extras, on a regular basis. Vehicles depreciate in value every year and so do the value of any extras – by an average of 15percent a year.

In brief: ensure that the sum insured includes the value of your vehicle along with all its extras, whether factory fitted or not.

Sean Pheiffer is the head of motor claims at Old Mutual Insure.

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