ODP is a cheaper temporary solution for car insurance
Comprehensive insurance cover is compulsory for vehicles financed through a bank, and it’s a contractual obligation for the duration of the credit agreement.
However, under the current economic circumstances and with extra budget pressures, vehicle owners might consider cancelling their insurance policy to save money. As an alternative, WesBank offers temporary cover in the form of an Outstanding Debt Policy (ODP), a measure that is in place until customers are able to afford comprehensive cover once again.
The cover is limited and doesn’t provide for third-party liability, which means the vehicle owner will be responsible, if found liable, for damage to another vehicle following an accident.
The policy covers the total balance outstanding on the customer’s account in the event of a total loss of the car resulting from a crash or theft, up to a maximum of R750,000. On average, the premium for ODP is about 30% of full comprehensive cover.
“While cancelling a vehicle insurance policy, or not insuring the vehicle at all, might seem an option during tough times, this choice could result in expensive consequences for an uninsured owner in the unfortunate incident of an accident or total vehicle loss,” says Lebogang Gaoaketse, WesBank’s Head of Marketing and Communication.
“The risks involved in not having any form of vehicle insurance far outweigh the perceived short-term savings by either cancelling an existing policy or not taking it up in the first place. Our advice to customers is that if they do not have comprehensive insurance cover in place or are experiencing problems with payment, they should contact the bank for assistance as soon as possible.”