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SA's No 1 Insurance Blog

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If I asked you to write an article about car insurance, what would you say?

So imagine how I felt when I was asked to write about AA insurance?

What’s there to write about?
They sell car, building, contents, and all risks insurance. But so do a ton of other companies.

As long as:

  • they’re cheap,
  • they pay your claims, and
  • they offer you money back,

who cares, right?

But there’s a few things I should say about the AA.

First things first; in this article AA stands for Automobile Association, and not the equally famous AA – Alcoholics Anonymous.

The second thing to know is that the AA is a non-profit organisation which exists for the benefit of its members. So when you join the AA, you become part of the family.

However, when it comes to Insurance Driven by the AA – They are there for profit!
BUT it’s all based on the reputation of their parent company. A company whose brand is based on honesty and integrity. AA Insurance could do some serious damage to that reputation.

So who would you want insuring your stuff?

  • with someone where you’re just a number on a balance sheet, or
  • someone who actually wants what’s best for both of you

You’re skeptical, correct? And I wouldn’t blame you either, but think about this:

The AA has always prided themselves on being the consumer champion.

  • Who wouldn’t want an AA inspection before buying a car voetstoots? If it’s a second opinion you need, then the AA has always been the one to tell you the truth. In fact the AA has sold franchise rights to DEKRA. They are the leader when it comes to vehicle testing stations in South Africa.
  • Who would SARS trust when it comes to working out how much they owe you? Yes, even SARS trusts the AA when it comes to calculating car allowance rates (Known as AA rates).

So the question is, would the AA be willing to blow their reputation – built up since 1930 – just to make a quick buck by selling you dodgy insurance?

So here are 7 benefits offered by AA insurance and no-one else:

How about no excess on motor damage claims?

So the AA will charge no excess IF you take your car to an AA approved repair centre. The one exception to this is if the damage being claimed works out to be less than the excess amount. And I’m not talking here about things like excess waiver which takes care of your excess for a small fee.

So if the panelbeater is good enough for the AA, then they’re good enough for us, would you agree?

How about excess discounts?

It would be a slap in the face to existing AA members if they didn’t get a discount for taking out insurance at the AA. So existing members get discounts based on the number of years they’ve been a member of the AA.

But it’s also a slap in the face for new members who’ve never claimed before either. So the AA gives an excess discount to new members based on their being insured and never having submitted a claim.

Going forward, for every 12 months you don’t claim, you get an extra 10% excess discount until you reach the AA’s maximum of 50%.

On my current insurance, my excess goes up every year, and I’m willing to guess yours does too (Along with the cost)

How about zero excess on windscreen claims?

Currently I pay R750 as a flat excess. Other companies work on 5% of the claim amount with a minimum of R500.

At the AA you pay no excess at all.

How about no premium increases?

Did I hear correctly? You said no premium increases.

That’s correct, but with two disclaimers.

  • If you don’t claim during a 12 month period, and
  • Have no change in your risk profile (stuff like a change of address)

Then your cost will not increase the following year.

Man, most insurance companies slap – at the very least – an inflation linked increase onto your cost every year. And every year you have to threaten them with cancellation to get a discount.

How about free AA membership?

I don’t care who insures your car at the moment. The big daddy of roadside assistance is the AA. In fact, few companies will dispute this. We wrote a separate article on this which you can read elsewhere on our site.

How about free battery replacement?

So let me ask you this: “When do most of us find out that our car battery is as dead as a door-nail?

If you’re anything like me, then it’s quite likely:

  • In winter, and
  • At home when you’re about to leave for work

Which is cool if you have the second car in the garage, or a spouse to give a lift, or a friend who lives close by. But what if you live all on your ace?
How on earth do you get your car to the nearest Battery Centre? And what if you’re down to the last pack of Salticrax, and can’t afford the R1, 000 for a new one?

Of course your car needs to be comprehensively insured to qualify for the free battery, but the one thing I know for sure is that my current insurance company most definitely won’t pay for it.

And how’s this for the icing on the cake:

How about ‘forgive and forget’?

There’s nothing worse than telling someone what a great risk you are, and then claiming a week afterwards. Has that ever happened to you?

I’m chuckling as I write this, but the AA believes in forgive and forget. I’ve had whole insurance contracts cancelled on me because of my clients claiming too much.
Here’s a company willing to forgive and forget.

This is how it works:

  • As long as the claim wasn’t caused because of your negligence, and
  • The AA is able to recover more than 70% of the loss
  • Then your risk profile won’t be affected by your first claim. In other words, because your risk profile isn’t affected, your cost isn’t affected.

Guess what?

At the beginning of this article I asked the question of what you’d say if I asked you to write an article about your car and home insurance company.
What’s funny is that I haven’t even gotten to the actual risks that the AA is willing to insure you against.

I’ll tackle that in the next article, but here’s a little secret…the AA is looking for new members.

  • Members who appreciate the honesty that the AA brings to the table, and
  • Members who are honest with them in return.

So I did an experiment…I had a quote done for myself. This is what happened:

First the irritating stuff everyone asks

  • First my ID number
  • Then my marital status
  • Then they wanted to know if I’m currently insured – and for how many years.
  • They wanted to know if I’d ever had insurance declined in the past
  • And how many claims I’d had in the past 3 to 5 years
  • And lastly, if I’d had any civil litigation against me or criminal record

Second, the less irritating stuff

  • Risk address
  • Security for the car at this address – behind locked gates
  • Date when I got driver’s license and type of license
  • Security at my home, roof and wall construction, etcetera, etcetera

Then the pleasant stuff I found out as we went through the quote

  • My car excess is currently a flat R3, 500. At the AA it dropped to a flat R1, 500 without me asking for it.
  • I was then told they replace a lost car key for R7, 500. And this without having to pay an excess. Get yourself a quote to replace a lost key and you’ll see how important this one is
  • Then there’s the R750 flat excess on contents claims. Try compare that to the R2, 000 excess on my current cover
  • Or how about the free burglar alarm warranty for damage caused by mechanical and electrical breakdown
  • Or the R25, 000 power surge cover built into the policy
  • And lastly, the price. Let me say they’re cheaper than my current insurer where I’ve never claimed, which blew me away.

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Until next time.

The InsuranceFundi Team


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