NEW MOTOR INSURANCE OFFER

[Phil Cooper]

I was at a launch of a new product with an insurance company last night.

They have launched an extension which I found absolutely fascinating.

As you know, when you insure your car, the value drops consistently over the years.

This company offers you the option now of insuring at the original retail value, and retaining that as long as you like.

If the vehicle is stolen or written off, you receive the insured value on the policy, and there is no depreciation or anything of a similar nature taken into account.

I think the rest of the market is going to have to follow, or find that there is a steady trek to this insurer.......

[wynn]

OK Phill, spill! how much for what value?

[Dave A]

The cynical part of me says insurance is a numbers game - and there's no free lunch.

Surely all you have to do (with those pesky insurers who insist that cars lose value over time) is make sure your policy is adjusted each year to match what the insurance company will pay out? And save on your premiums?

[Phil Cooper]

RIGHT

There IS no thing as a free lunch - you will pay a premium based on the value for which you want to insure.

DAVE - a good Broker will automatically decrease value at renewal every year. HOWEVER - if, say, your car is worth R200K on Jan 1, for which it is insured, and it is written off on 28th December, it may only be paid out at, say, R150K, the value at the time of loss.

On this product, you would still get R200K - and if you choose to renew at that value, the same thing would happen the following year, etc.

[alecmcg]

RIGHT

There IS no thing as a free lunch - you will pay a premium based on the value for which you want to insure.

DAVE - a good Broker will automatically decrease value at renewal every year. HOWEVER - if, say, your car is worth R200K on Jan 1, for which it is insured, and it is written off on 28th December, it may only be paid out at, say, R150K, the value at the time of loss.

On this product, you would still get R200K - and if you choose to renew at that value, the same thing would happen the following year, etc.

Hi Phill

Been in the Industry 30 years
I would like to know more about this product
Short term Insurance is not an Investment Portfolio, Except on HD Vehicles( Transport) with a premium over 500Kpm then you can self insure a portion with a percentage of the premium comming back to you, then again it would depend on your loss ratio

Imagine you bought a vehicle for R200000 IN 2010 it would pay you to keep the vehicle for 10 years then write the vehicle off,

Regards

[Martinco]

Sounds interesting but the numbers will tell if it is a deal or not.
Do we have some examples ?