1ST PARTY INSURANCE
1st party insurance with Redisure
First Party in a car insurance agreement normally refers
to the person who insures his or her vehicle. It is thus the
main insured party. The 1st party insurance term as such refers
to insurance cover for the First Party and his or her passengers.
What does 1st party insurance include?
Unlike with 3rd party insurance, where a party who isn’t
part of the insurance agreement between the First Party (insured
person) and the Second Party (the insurance provider), that
can be a beneficiary to the contract, 1st party insurance
covers the insured person who is part of the contract.
The 1st party insurance covers expenses for the insured
person and his or her passengers and not so much liability.
This includes medical expenses, and loss or damage to the
insured person’s vehicle. Redisure also covers the hotel
or accommodation expenses that may arise from an incident.
If for instance, you are involved in an accident between two
towns and have to stay at a hotel until you get transport
to your location, due to the loss or extensive damage to your
vehicle, it will be covered under the Comprehensive Cover
of Redisure.
As part of the Comprehensive Cover, which includes 1st party
insurance, Redisure also covers damages to your vehicle due
to an accident. Even when the vehicle is parked, something
can happen. Under this type of insurance cover, a person can
also get cover for lightning and hail. It is however, important
to add this to the policy and not assume that it is covered.
Theft of motor vehicles occur on a daily basis in South
Africa. The Redisure Comprehensive Cover, as well as the Third
Party, Fire and Theft Policy cover the insured person against
loss of his or her vehicle due to theft. Damage caused by
a break-in is also covered. This includes replacement of the
vehicle locks, and windscreen damage.
Under the 1st party insurance policy, the First Party can
obtain gap payment from the insurance company. This means
that the credit shortfall is covered by the insurance company
where the value of the car is less than the outstanding amount
on the credit agreement. In this way your vehicle is paid
in full. Financial and lending institutions require this type
of policy when you hire purchase a vehicle or lease it for
a period. This is necessary to cover their risk where your
car is stolen or damaged beyond repair.
What about excess?
In the unfortunate event of an accident, theft, fire, or
break-in, you have to pay a certain amount before the insurance
company pays the bulk of the damage or replacement costs.
You have two options:
- Choose to pay a larger excess and have the benefit of
a smaller premium
- Choose to pay a smaller or no excess, but pay a higher
premium
When you select your option, it is important to remember
that the excess is payable before the insurance company pays
the rest. If you don’t have the amount required, the
insurance company cannot pay the outstanding amount. If you
select this option, place money in a separate account to prepare
for any unforeseen events. This does have the benefit of smaller
premiums that helps to keep your monthly expenses low.
Other ways to reduce your premiums include:
- Purchasing a low theft risk and maintenance vehicle of
which the motor parts are readily available and not too
expensive.
- Purchasing a smaller and more affordable car.
- Reduce the risk of theft by parking your car in a lockup
garage and by installing VESA approved anti-theft devices.
- Driving safely and not claiming for a set period to qualify
for no-claims bonus.
- Insuring your vehicle with Redisure, where you don’t
pay broker commission as part of your premiums. Redisure
only charge a flat fee, far below normal broker commissions
for 1st party insurance.
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