Whether you are an owner of a car or looking to buy a new or used car, it's in your best interest to consider what type of car insurance will best suit your needs. This article provides some insight on car insurance in South Africa.
What is car insurance?
In broad terms, car insurance can be described as - Financial protection against loss due to theft, traffic accidents, natural disasters and subsequent liabilities.
The insured person will be required to pay a monthly premium as insurance and the insurance company, or insurer, promises to support financial losses involving vehicles for the duration of the insurance policy.
What are the benefits of car insurance?
South African roads are considered to be amongst the most dangerous in the world and insurance is therefore a necessity if you own and drive a car in South Africa. Here are some of the benefits of having insurance for your car:
- Car insurance offers you peace of mind while you drive your car
- Car insurance offers financial and legal backing in the event of an accident or theft
- Car insurance can cover the damages and medical expenses incurred in the event of a car accident
- Car insurance can protect you financially against theft and associated damages, as well as fire and natural disasters
- Car insurance can protect you financially from lawsuits associated with accidents
*Tip: The losses covered by a insurance policy will depend on the type and extent of coverage you choose.
What are the different types of car insurance available in South Africa?
There are three main types of insurance available in South Africa namely Comprehensive, Third Party Fire and Theft and Third Party only insurance.
Comprehensive Car Insurance
Third Party Fire and Theft (Limited Liability)
- Comprehensive insurance generally covers theft, hijacking, damages caused in an accident, fire, explosion and natural disaster
- Comprehensive insurance generally covers damages incurred to third parties in the event of an accident
- Comprehensive insurance is the most expensive type of car insurance
- Comprehensive insurance is a requirement if you are financing the payment on your car
- Comprehensive insurance is most suitable for new and expensive cars that clock up high mileage
Third Party Only
- Third Party Fire and Theft car insurance generally covers damages incurred to third parties and includes vehicle damage, accidental death and injury caused in the event of an accident
- Third Party Fire and Theft covers losses due to hijacking or theft and may also cover losses caused by fire, lightning or explosion
- Your car is not insured for damages incurred in the event of an accident
- Third Party Fire and Theft car insurance is suitable for cars that are almost paid off and clock up average mileage
- Third Party only insurance covers damages incurred to third parties in the event of an accident
- Third Party only insurance does not cover damages to your car, theft, hijacking or natural disasters
- Third Party only insurance is the cheapest type of car insurance
- Third Party only insurance is most suitable for old cars that clock up low mileage
*Tip: Different car insurance providers offer different car insurance packages. Be sure to check and compare the benefits stipulated in the car insurance policy before signing the agreement.
What factors will influence your car insurance premium?
Many factors influence the premium you will pay for car insurance. Being aware of the factors that influence car insurance premiums can save you money when shopping for car insurance. Here are some factors that determine car insurance premiums:
- Insurance Choice - The amount of cover you choose will determine how much you pay as a premium. Comprehensive car insurance is the most expensive with Third Party only car insurance being the cheapest. Costs vary depending on the company you choose.
- Age - Younger drivers, including teenagers, are considered to be high risk and therefore can expect higher car insurance premiums. Older, mature drivers are considered to be lower risk and therefore obtain a lower car insurance premium.
- Sex - Male drivers are considered to be high risk when compared to female drivers and therefore can expect higher car insurance premiums. Married individuals also receive lower premiums when compared to single individuals.
- Location - Your car insurance premium can vary depending on where you live and where you drive your car. If you live in a city, which is considered high risk, you can expect to pay a higher premium when compared to living in a rural area.
- Security - If your car has sufficient anti-theft security such as a gear lock, alarm system, anti-hijack, satellite tracking and is parked in a garage, you can expect a lower premium when compared to a car parked on the street without any anti-theft security devices.
- Excess - Excess is the amount of money you pay when claiming from your insurer and the more you are willing to pay in excess, the less your monthly premium will be.
- Car Model - The make and model of your car can drastically influence your car insurance premium. Some models are considered high risk in terms of theft and hijacking and therefore warrant higher premiums. Expensive cars are generally subjected to higher premiums when compared to cheaper cars due to high repair costs.
- Driving History - If you have a history of accidents and negligent driving you can expect a higher car insurance premium when compared to someone who has a clean driving record.
- Mileage - Higher mileage increases the chance of an accident which translates into higher risk. If your annual mileage is high, you can expect to pay a higher car insurance premium when compared to average or low mileage motorists.
*Tip: Take the time to shop around for car insurance that suits your needs and financial situation. Get several car insurance quotes and compare them before making your decision. Obtaining several car insurance quotes is simple with Cars.co.za, there's no need to go anywhere else.
Car insurance is an important aspect to owning a car and you should therefore assess your needs and obtain as many car insurance quotes as you possibly can before making your final decision. Can you afford not to have car insurance?
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