Excess Buy-back Insurance
Truck and Commercial insurance is very complex and detailed and should be carefully managed. Excesses ranging from 5% to 20% of the value of the vehicle is commonplace which means that if you have a rig valued at R 1 000 000 you might sit with a minimum excess of R 200 000 if you are involved in an accident! This will cause a major cash flow problem in any small to medium sized transport business.
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The only way to effectively manage this is to take out additional insurance cover in the form of an Excess reducer policy. This policy will reimburse you for your policy excess, thus helping to lessen the impact of the claim on your business and your cash flow.
Types of Cover available
- Basic Excess Buy-back
- Theft/Hijack Excess Buy-back
- GIT Excess Buy-back
Own Damage basic Excess Buy-back
As explained before, basic excesses on a truck and trailer can range from 5% to 20% of the value of the vehicle. The Own damage basic excess buy-back policy will reimburse you the amount of excess payable to the main Insurer after you were involved in an accident situation. To use an example, if your minimum excess is R 50 000 under your truck insurance policy, your Excess Buy-back policy will pay out to you the R 50 000 excess that you are liable for. Keep in mind that this type of cover is in addition to your normal truck insurance policy and you will need to pay an additional premium for the additional cover.
Theft/Hijack Excess Buy-back
In the case that a vehicle or trailer is stolen or hijacked the theft excess on a commercial truck insurance policy can range between 10% and 20% of claim. In our example above, on a rig of R 1 000 000, your Theft/Hijack excess can amount to R 200 000. The only way to effectively manage this additional risk is to take out additional insurance cover in the form of a Theft/Hijack Excess reducer policy. This additional policy will effectively reduce your theft/hijack excess to R0 if your truck or trailer is stolen or hijacked.
GIT or Goods in Transit Excess Buy-back
The applicable excesses on a GIT or Goods in Transit policy will depend on the level of cover required. Excesses can be very high so be sure that you understand the full implications. GIT Excess Buy-back insurance will reduce your GIT excesses in the event of a claim.
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