The extras on your vehicle can easily add 50% to its value, and failing to specify these items puts you at risk of being underinsured - and being paid less than you were expecting when you claim.

Vis Govender, principal at PSG Insure Bryanston, says claim payouts are usually based on the value for which your vehicle is insured, which in turn is determined by the value you declared, or that your broker calculated based on how you described your vehicle.

Govender says anything optional that is fitted - either by the manufacturer or by an approved provider - that did not come with the standard factory version is referred to as an extra or accessory.

Examples of extras include towbars, bullbars, sunroofs, navigation systems, interior trim, paint finishes, wraps, branding, tracking devices, wheels, music systems, leather seats, winches, off-road features, antitheft devices, window treatments, an extra row of seats, baby seats, canopies, long-range tanks, modifications for specific uses and an almost endless list of added features that enhance the vehicle's functional ability or aesthetic appeal.

These extras vary greatly in price, with the potential to increase the base value of a vehicle by as much as 50%, Govender says.

Marius Steyn, technical underwriter manager at Santam, says vehicle extras can range from R2,500 to more than R50,000, depending on the vehicle.

Sean Pheiffer, who heads up motor claims at Old Mutual Insure, says a high-end sound system for a luxury vehicle alone can be as much as R50,000.

The impact of undervaluing your vehicle

Failing to insure your vehicle for its full value, which must include accessories, will not impact any claim for damages that don't lead to a write-off.

Therefore, the full cost of repairs for a partial loss, such as damaging your bumper in a parking lot, will be paid, Steyn says.

However, if your insurer decides to write off your vehicle because it is not economical to repair it, or if it is stolen or destroyed by fire, you will lose out financially if your vehicle is not insured correctly.

If you don't insure your vehicle properly, your premium won't match the risk to which the insurer is exposed, Govender explains.

If you have financed your vehicle, you could be liable for the difference between what the insurer pays and what you owe the finance house - typically the purchase price including the extras less your repayments, Pheiffer says.

What's your claim amount?

It is very important to check whether your insurer will pay claims for a total loss based on the market value or retail value of your vehicle and how your insurer defines these terms, Steyn warns.

Some insurers define the market value as the average between the trade value (what you'd get if you traded it in or sold it to a dealer) and the retail value, while others refer to market value as the value that the vehicle dealer will pay you when they buy it.

If an insurer states it will pay out the retail value, it could mean the TransUnion M&M database retail value. TransUnion analyses data from manufacturers and major dealerships monthly to provide the average retail and trade values for various makes and models of vehicles, and many insurers and dealers use this database to value vehicles.

If the insurer states it will pay you out the market value, it could mean the average between the TransUnion trade and TransUnion retail value, Steyn says.

Santam's definition of market value is the retail value adjusted by all the extras and the mileage and condition of the vehicle. It is not the value a dealer would offer you, but rather the value at which the dealer would sell your vehicle, taking its condition, mileage and accessories into account, Steyn says.

Steyn adds that any accessories that can be removed, such as canopies or roof racks, must be specified on your motor policy.

You must take into account what extras your vehicle has and either specify these extras or ensure that the sum insured is sufficient to include the value of the extras, he says.

Pheiffer says most of its commercial policies provide cover for factory-fitted extras without your having to specify such items, provided the sum insured is sufficient to cover the extras. However, policyholders with personal cover are required to specify extras that they have subsequently added to their vehicles.

Old Mutual policyholders with personal insurance cover are paid out on the retail value, he says.

Govender says PSG gives you the option to select the basis of cover (such as "agreed value" or "retail value" or "market value".) A PSG adviser will generally recommend that you insure at retail value unless the vehicle in question is an unusual make, in which case insuring on an agreed-value basis will be recommended.

But, says Govender, in all instances it is safest to specify the extras regardless of whether you insure on a retail-, market- or agreed-value basis and the extras must be factored into the valuation and taken into account when annual adjustments are made.