Car Insurance

What is Car insurance?

In exchange for a monthly premium, your car insurer will provide you with car insurance which will cover your vehicle for theft, loss, or damage to your vehicle and someone else’s in the event that you cause the damage.

Is this insurance mandatory in South Africa?

While car insurance is arguably the most important type of cover to have as a South African, it is not compulsory. In fact, more than 70% of motorists have no cover at all. You will, however, require comprehensive insurance if your vehicle is financed.

Is driving without Car insurance illegal in South Africa?

Driving without insurance is not illegal in South Africa since there are no specific laws that require a driver to have car insurance.

What does my Car insurance cover?

Vehicle insurance may cover damage to your car in an accident or as a result of fire or a natural disaster, theft, hijacking, and damage to a third party’s vehicle and person in the event that you are at fault.

What are the different types of Car insurance?

There are three types of car insurance;

• Third-party cover that covers you for liability when you cause damage to a vehicle or person.
• Third-party, fire, and theft that covers you for third party liability if you cause damage to someone else’s person or vehicle, and will pay you the replacement value of your vehicle if it’s damaged by fire or if it is stolen.
• Comprehensive cover will cover all of the above as well as damage to your own car in the event of an accident and will pay out the replacement value if your car is hijacked.

Comprehensive vs Third party, fire, and theft

Basic third-party insurance covers damage caused by you to a third party’s vehicle. This is also covered by third-party fire and theft in addition to covering you in the case that your vehicle is stolen or damaged as a result of a fire.

Comprehensive car cover covers all of the above as well as damage to your own vehicle whether or not you were at fault. This is the most expensive type of cover because it offers the highest level of protection.

Do I really need comprehensive insurance?

Comprehensive cover is recommended for new models of vehicles and classic or vintage vehicles but is not always a good idea for people with older cars with lower market value.

Here's why Third party, fire, and theft may be not enough

Third-party, fire, and theft should offer you sufficient cover if you have an older vehicle that you own outright. That said, if you’re involved in an accident the damage to your own car will be left for you to cover (whether or not it was your fault).

Who offers the Best Car insurance in South Africa?

While Outsurance is the largest insurance provider by the number it’s King Price that receives the highest number of compliments and lowest number of complaints according to online reviews. Following King Price were AA, Momentum, and Discovery.

Retail value vs Market value

The retail value is the amount at which your car would sell from a dealership and the trade value is the price that a dealer would pay you to purchase your car. The market value, which is what your vehicle is likely insured for is the average of the two.

Does my Car insurance cover death?

Car cover will not cover death. For funeral cover, you should look for an insurer that provides accidental death and disability cover. Note that this will be a completely separate policy.

Will my insurance cover retrenchment?

Car cover does not cover retrenchment but you can take out an income protection plan as a separate policy from several South African insurers.

Does car insurance have a waiting period?

It does not have any waiting periods as it is considered short-term insurance so you can enjoy cover from the very first day.

Does my Car insurance cover mechanical services?

Your insurance will not cover you for any routine maintenance or repairs on your vehicle. This must be covered by a vehicle maintenance plan or out-of-pocket.

Why is my insurance premium increasing every year?

Your premiums increase rather than decrease because of inflation as well as the ever-increasing costs of repairing a vehicle, even if the mileage increases and the age of the vehicle go up.

What is an insurance excess?

The amount that you will be required to pay for your insurance company to process your claim is usually expressed as a percentage of your claim amount or a fixed amount.

Why are the Car insurance quotes I'm receiving so expensive?

Many factors are taken into account when determining an insurance premium but if your quotes are high you’re likely being considered a high-risk driver.

This is what will influence your insurance premiums:

• The retail or market value of your vehicle, with more expensive vehicles necessarily carrying a higher premium
• What do you use your vehicle for and how often do you drive
• Whether you’re a man or a woman, women generally receive lower rates
• Your age, with young and inexperienced drivers being considered a higher-risk
• Your insurance claims history
• The excess option that you select
• Vehicle security and home security
• Where you live and work with certain “high-risk” areas attracting higher premiums for the added risk

Do I still have to pay the excess if the accident wasn’t my fault?

Even if the accident wasn’t your fault you will have to pay excess for your insurance to process your claim. Your insurer will make attempts to claim the money from the responsible party and, if successful, will refund the amount you paid.

Excess fees are a way for insurance companies to encourage customers to be more responsible and not make petty claims on their car insurance. You can set your excess amount based on how much risk you’re willing and able to take on.