Illustration: Colin Daniel

Santam is providing an option on its vehicle insurance that guarantees the market value of your car quoted in your policy schedule for the 12 months until your policy is renewed. This is after a national survey of policyholders showed how attached South Africans are to their wheels.

According to the survey, almost two-thirds of respondents consider themselves to be “very or extremely attached” to their vehicle and four in 10 drivers have given their vehicle a name, meaning they have a very personal and somewhat emotional relationship with their cars.  

The survey was sent to more than 1 900 South African car owners with insurance policies. Asked how they would cope if their car was written off or stolen, 40% of respondents indicated that they were in a position to buy another vehicle, whereas 37% said they would not be able to continue with their normal daily lives.

Mokaedi Dilotsotlhe, Santam’s chief marketing officer, says the survey allowed the company to offer a variety of insurance products that cater to clients’ needs.

“Where the car-owner relationship becomes most apparent is when a vehicle is lost forever,” Dilotsotlhe says. 

“We have responded by introducing a product that removes any uncertainty around what clients can expect as compensation during a total vehicle loss.”

The product is in the form of an option on your vehicle cover that, for a slightly higher premium, guarantees that when your car has been deemed uneconomical to repair or if it is stolen, you will be certain about what your compensation will be. 

Attie Blaauw, Santam’s head of personal lines, says vehicles are typically insured for their market value – the value determined by the market for which similar good-condition models of the same vintage are sold. 

He says your insurance policy will often provide an indicative value and some insurers don’t stipulate a rand amount. 

However, the actual market value of a vehicle in the case of total loss may differ from the indicative value on the schedule.

Condition and mileage differ from vehicle to vehicle and, because the loss may have occurred some months after you received the updated policy schedule reflecting the market value of your car, there may have been further depreciation on the car or a change in market conditions.

So, he says, the pay-out value for total loss may be substantially lower than the indicative amount on the schedule. This is not necessarily an unfair practice, he says, because insurers price the depreciation on your vehicle into your premiums.

For a slightly higher premium, the Santam option guarantees a specified rand market value for your car for 12 months, until the annual renewal of your policy. 

This value then applies until the annual renewal of your policy, when a new value is agreed.