Top 10 Asked Questions About Car Insurance


There are countless questions customers ask every day concerning their car insurance policy. We’ve decided to nail down just a few.

When taking out insurance, it can often be confusing and, nine times out of ten, we’re not entirely sure what we are covered for.

Take a look at these frequently asked questions – can you answer all ten?

10 FAQ About Car Insurance

1. What Is The Difference Between Retail And Market Value?

Retail value is the likely selling price of the vehicle by a motor dealer to a purchaser. The market value of a car is the average between the likely trade and retail values of a vehicle.

The retail value is also the closest value to the replacement value of your insured motor vehicle.

2. Will My Premium Decrease Every Year?

The annual premium review takes into account the depreciated value of the vehicle. This, however, is not the only factor which determines the premium.

Since the cost of repairs and parts constantly increase with inflation, and the majority of claims are for accidents, premiums will increase in order to cover the cost of repairing vehicles. 

3. Do I Have To Go To a Specific Panel Beater?

No, while your insurance provider may refer you to a specific panel beater, you are free to choose who you want to go to, as long as they are accredited to work on vehicles.

4. If I Want To Cancel An Insurance Policy, What Is My Notice Period?

If you are changing providers, or can no longer afford your insurance, most insurance providers request a one month’s notice. This, however, will depend on your specific policy and what was detailed in the contract.

5. How Long Does It Take To Get An Insurance Quote?

Technology has allowed customers to receive instant communication from providers when inquiring about certain insurance products. You can fill out your details on a provider’s website and have a friendly call agent calling you within minutes to discuss your insurance needs.

6. What Is Soft Fraud?

Soft fraud is lying about certain criteria on your insurance policy that determines your premium. This may be your driving history, where you park your car at night, or whether or not you have a tracking device in your vehicle.

7. Can My Age Affect My Premium?

Premiums are usually determined by the belief that your driving risk reduces with age. This may be reasoned with fewer accidents by older drivers, when compared to young or new drivers.

Premiums are thus charged according to a sliding scale, where an 18-year-old driver will pay the highest premium, which reduces over the years.

8. Is Car Insurance Tax-Deductible?

If you are self-employed and use your personal vehicle for business, you can take a tax deduction for your car insurance. For example, an independent sales professional who travels for work can take the deduction. However, only the actual mileage used for business travel is deductible. In other words, if you drive a vehicle 10 000 km for business and 10 000 km for personal use (a total of 20 000km annually), your deduction will cover half of your overall use.

9. Can My Insurance Provider Cancel My Policy?

Your insurance policy is a contract, which means it can be cancelled or voided by either party. While you can drop the contract by changing to another company, an insurance provider can cancel your policy if you commit any of the following;

  • You fail to pay your premiums.
  • You present fraudulent information on your application for coverage.
  • Your license is suspended or revoked for any reason, such as too many accidents, or driving under the influence.

10. Does Your Credit Score Affect Your Insurance Premium?

While credit scores, and credit reports, don’t always tell the full story about a person, they do indicate your ability to pay your bills. And, this is what an insurance provider will care about.

By checking your credit, a car insurance company can determine your insurability. Remember, your premium is a bill like any other, which means a poor credit score can alert an insurer of financial trouble. An insurer may decide you are too risky to insure if there is a chance that you may miss a payment.


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