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A guide to car insurance in South Africa

Car insurance in South Africa

Accidents happen – you need car insurance

Car insurance in South Africa is a non-negotiable. Accidents happen all the time. While browsing online, I found the most hilarious list of insurance claim explanations on Bussiness Balls. Here are a few I like:

  • “I was driving along the motorway when the police pulled me over onto the hard shoulder.” 
  • “Unfortunately I was in the middle lane and there was another car in the way..”
  • “Going to work at 7 am this morning I drove out of my drive straight into a bus. The bus was 5 minutes early..” 
  • “I started to slow down but the traffic was more stationary than I thought.”
  • “On approach to the traffic lights, the car in front suddenly broke.”
  • “I didn’t think the speed limit applied after midnight”
  • “I collided with a stationary truck coming the other way”
  • “Coming home I drove into the wrong house and collided with a tree I don’t have.”
  • “My car was legally parked as it backed into another vehicle.”
  • “The accident occurred when I was attempting to bring my car out of a skid by steering it into the other vehicle.”
Accidents happen

Much like taxes, no one teaches you about how car insurance works at school. No one teaches you about any type of insurance. So, you’re left trusting companies you don’t know to take care of your most valuable possessions.

What should you expect from your car insurance company? Is there any hidden information in the long list of ‘Ts & Cs’? What does the insurer cover? How much does the insurer cover? What does the insurer not cover? And the burning question: Which insurance company should I choose?

Let’s get started with car insurance in South Africa

We know that South Africans are facing a tough economic climate. You don’t have time or money to waste. You especially can’t afford to lose money as a result of theft or an accident. So, here’s an article especially for you, fellow South African. We hope it helps you clear up any uncertainty about taking out cover for your car.

What is car insurance?

Car insurance is a contract between you and an insurance company. It protects you against financial loss in the case of an accident or theft. You pay a monthly premium to your insurer. Your insurer will cover your losses as outlined in your policy with the insurer.

insure your car

Types of car insurance

There are three main types of car insurance:

  1. Comprehensive cover
  2. Third-party cover
  3. Third-party cover, fire and theft

1. Comprehensive cover

Comprehensive cover is the highest level of cover for your vehicle. It’s also the most recommended type of cover. Comprehensive insurance covers damage to your own vehicle and any damage caused to other vehicles as a result of accident, fire or theft. If any of these things happen to your car, your insurer will either repair it or compensate you according to the value of your car or the sum of your insured vehicle. You will only be responsible for an excess amount. The excess amount depends on your premium – the lower your premiums are, the higher your excess will be.

Because it provides the most extensive cover, it is also the most expensive type of insurance. But, it’s worth it!

2. Third-party cover

Even though having comprehensive car insurance is advised, it may be too expensive for you. Third-party cover is not extensive cover but it is cheaper than comprehensive cover. We believe that any cover is better than no cover. 

Who is the third party?  You are the first party. Your insurer is the second party.  The third party is the person who lodges a claim against you because they suffered a loss as a result of your actions. 

Third-party insurance covers the cost of any damage you cause to someone else’s vehicle. If you don’t at least have this type of cover, you could be liable for crippling costs if you cause an accident that damages another vehicle, especially if it’s an expensive model.

Third-party cover may be for you if you have an older, paid-off car or don’t drive too often or long distances. 

It’s important to note that this type of insurance does not cover any damage to your own car.

3. Third-party cover, fire and theft

This type of cover provides cover for accidental damage caused to another person’s vehicle. The difference between this and third-party only insurance is that your car is also covered in the event of theft, hijacking or fire. Your car is not covered for accidental damage.

On Fire Burn GIF - Find & Share on GIPHY

Factors that affect your monthly premiums

On top of car installments, maintenance and fuel costs, you need to factor in the cost of car insurance. You can shop for affordable, yet still reliable, car insurance in South Africa. Your monthly premiums will depend on the following factors:

  1. The retail value of your car. This is the value of your car according to the make and model, the condition, the model year and mileage. These factors determine the estimated price a dealer can sell your car for. Your insurer will have to cover the retail value of your car if it is stolen or written off – or the amount stipulated in your policy. Therefore, the more expensive your car is or is to repair, the higher your premiums will be. Some cars are also stolen more regularly and therefore present a higher risk to the insurer. We’ll discuss the cheapest cars to insure further into this article.
  2. Demographics. Gender, age, home address, financial history and marital status may also affect your monthly premiums. Your insurer will assess this information to determine if you’re a low- or high-risk customer.
  3. The main driver. This is the person who will be driving the car the most. This person’s age and other details will have an impact on the monthly premiums. Keep in mind, younger drivers – usually drivers below the age of 25 – pay higher premiums. This is because they have less experience on the road and are therefore a higher risk to the insurer. 
  4. Inflation. The age of your vehicle may affect your premiums. The older your car is, the less it’s worth. Often when you’re with the same insurer for a long time, you end up paying more than you should for insurance because the value of the vehicle decreases but your premiums don’t. Click here to find out more about insurance that decreases with the value of your car.
  5. Security. Security measures can reduce your premiums, such as a tracking device and secure parking at night. The area you live in may also affect your premiums as some areas are more dangerous than others.
  6. Private or business use. If you’re using your car for business purposes, such as visiting clients,  you will have to insure your car for business use.

Cheapest cars to insure in South Africa

According to Compare Guru, the following cars are the cheapest to insure in South Africa:

  • The Volkswagen Polo
  • Toyota Yaris
  • Toyota Tazz
  • Corsa Lite
  • Volkswagen Golf

Top stolen cars in South Africa

According to Car Mag, these are the 10 most stolen/ hijacked passenger vehicle brands in South Africa

  1. VW (Volkswagen)
  2. Toyota
  3. Ford
  4. Citroen
  5. Kia
  6. Hyundai
  7. BMW
  8. Audi
  9. Renault
  10. Chevrolet
Top stolen cars in South Africa

Which car insurance company should you choose?

It’s tough to say which insurance company is best for you. However, there are big insurance companies that are trusted by thousands of South Africans. Here’s a list of the top 10 car insurance companies according to Top 10 Best Car Insurance Companies. You can read all the reviews and make an informed decision for yourself.

You may also want to read: Driving without car insurance in South Africa. Should it be illegal?

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