Being forced to overinsure!?

P

Polk

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Hi Guys,

I'm pulling my hair out over this - wonder if anyone else has had this sort of problem.

I want to buy a KIA proceed demo for R180 000 but all the insurance companies will only insure me on the book value of the car which i R289 000!!

KIA reduced the price on these models heavily with the import of the Cerato Koup but the insurance companies havent changed the book value, so you're forced to over insure by almost R100 000!

As you can imagine this increases premiums heavily :(
 
Hmm interesting conundrum. I think the insurance companies are probably making sure they can cover the cost of replacing that vehicle, or having major repairs done, should you crash it tomorrow. Remember that all parts needed for that car has to be imported, and it is doubtful that the price per part has come down as the sale price did, so the replacement cost on a part-by-part basis would still be high. Whether this is the case I would not know, but cost of repairs play a big role in insurance premiums as far as I know.

Another thing to consider, will the sale price for the car be escalated at some point in the future? If so, they have to cover themselves for the potential loss. All I can suggest is to wait maybe a month or two, and then contact your insurer to see if the book value has decreased, and then re-adjust your premium.
 
Doesn't it translate to replacement costs - i.e., if the car was written off completely and had to be replaced, is the insurance company gauranteed to be able to buy it at R180,000?

My guess is no... If it is true that the general costs would come down, then probably in a couple of months' time you can phone them and argue for a lower premium.

EDIT: MFour beat me to it!
 
Well if they wanna do that, buy it, insure it, write it off, make them pay you R289 000, pay your finance the R180 000 and walk away.
Rinse and repeat if you want! Three times and you'll have your car for free, drive it without insurance just 3rd party for the next 5 years and you won't have paid for it, won't have had to pay much insurance on it and in 5 years your record will be well over the 3 year mark for next time you apply for insurance.
 
The main thing that changes the premium is the risk, not the price of the car.

My dad insures two cars, one is worth R130 000 the other over R200. He pays R450 for on and R 650 for the other.
I have the exact same R130 000 car, same year, same insurance company and everything. I pay over R1000 PM
 
Nerfherder said:
The main thing that changes the premium is the risk, not the price of the car.

My dad insures two cars, one is worth R130 000 the other over R200. He pays R450 for on and R 650 for the other.
I have the exact same R130 000 car, same year, same insurance company and everything. I pay over R1000 PM
Click to expand...

Yes. So using bboy's system, polk would very quickly be seen as an extremely risky client and his premiums will go through the roof!
 
yes.. but he wont have to insure the car as he never paid for it in the first place!
and by the time he does have to insure a new car it should of been long enough to not incur a penalty
 
bboy said:
Well if they wanna do that, buy it, insure it, write it off, make them pay you R289 000, pay your finance the R180 000 and walk away.
Rinse and repeat if you want! Three times and you'll have your car for free, drive it without insurance just 3rd party for the next 5 years and you won't have paid for it, won't have had to pay much insurance on it and in 5 years your record will be well over the 3 year mark for next time you apply for insurance.
Click to expand...

how do you write a car off without risking serious injury?

also, it might work once, but I think they would get suspicious after the 2nd, not to mention the 3rd.

new-kia-proceed%2520(2).jpg

nice car btw
 
Last edited:
kevinswan007 said:
how do you write a car off without risking serious injury?

also, it might work once, but I think they would get suspicious after the 2nd, not to mention the 3rd.

new-kia-proceed%2520(2).jpg

nice car btw
Click to expand...

That why you buy 3... park the one at the top of the driveway... handbrake fail and it crashes into the other two at the bottom and they all go down in a big ball of fire :)
 
i think thats normal.
i paid 205k for my car but the book at new was 220k, which is what i had to insure it at for the first year.

luckily, depreciation hit and the insured value dropped along with it after a year.
 
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