Carprehensive is an oxymoron and a car insurance policy underwritten by Prime Meridian. How many insurance companies can boast that? Carprehensive has simplified comprehensive car insurance to self-insurance. It’s based on the premise that insureds can reduce their own risk and cover smaller damage themselves, and comes to the rescue in only dire circumstances.
The policy does not cover the full value of total loss or third party damage if it is more than R250 000. According to the policy wording, Carprehensive only pays out the trade-in value of the vehicle in the event of total loss, which, according to the Ombudsman for Short-Term Insurance (OSTI), is neither the market nor retail value of the vehicle.
Carprehensive total loss
Although total loss of the vehicle includes theft, hijacking and write-off, Carprehensive insurance only covers the vehicle for its full trade-in value if it is stolen. If it is written off in an accident, the policy only pays out 80% of the current trade-in value. This means the policy only caters for total loss in the event of the theft and hijacking.
What’s more, if an accident caused by the insured results in the total loss of the third parties vehicle, Carprehensive car insurance will only pay up to R250 000, leaving the insured to cover the difference. Further, third party damage is only covered if it is greater than R50 000.
So why would anyone opt in for a Carprehensive insurance policy, you ask? Because they only cover total loss under certain circumstances and third parties up to a limited amount, the insurance premiums are among the lowest on the market. The premiums are also lower as the vehicle is only covered for its trade-in amount, while insureds cover smaller losses themselves.
The policy also comes with some stringent exclusions which further limits the insurance company’s risk. The car is not covered if it was off-road when the accident or damage occurred, exceeding the speeding limit, violated any road traffic laws or was a result of smooth tyres. As most accidents occur under any one of these conditions, Carprehensive may never have to pay out a claim, says OSTI.
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