Having car insurance in South Africa is no longer considered a luxury. It’s a necessity. To many people, it is already an essential component to owning and operating a car. You get the car serviced, you put petrol in to keep it going, you look after it and you pay your insurance. 

Some people get insured the moment they buy their car. Why? Because if you’ve spent any time on South African roads, you know that the worst can happen at any moment. Somewhere down the N1 highway, you’re going to run into somebody whose car is held together with duct tape and cable ties, and they have no idea what they’re doing. You can compare car insurance quotes online to find the best deal.

Before we even get into the outrageous crime or road accident stats in this country, let’s take a look at one of the most obvious reasons why you need some form of insurance on your vehicle. The AA (Automobile Association) releases annual statistics showing that 65% - 70% of the 11.4 million registered cars in the country are not insured. That’s roughly 7.9 million possible ways for you to get smashed into at an intersection by somebody playing with their phone, and leaving you to foot the bill. 

Your odds aren’t looking good, and sooner or later, it might be you. 

<insert maniacal laughter here> 

So! Car insurance can be complicated, but it doesn't need to be. In this article, we’ll attempt to put together the ultimate guide to understanding car insurance. What it is, why people tend to avoid it, how it works and why you need it.  

Car insurance is available for motor vehicles, motorcycles, light delivery vehicles, caravans and trailers. 

You’ll hear a lot of words you might not understand, such as Excess. An Excess payment is a contribution that you’ll have to pay when claiming your policy. Which means, if something were to happen and the incident is covered by your insurance company, you make a claim, you pay the excess amount owed and they pay the rest. 

Car insurance doesn’t cover normal wear-and-tear or car services. As with most insurance, your car won’t be covered for intentional damage either. It is also important that you read your policy schedule. You need to know of any types of cover that may be specifically excluded on your policy. Make sure that your car is covered outside of South Africa when you leave the country, in which case you need to request a certificate from your broker or insurance company. This certificate confirms that you have a cover on the car, and must be presented at the border. 

You get three types of insurance for your car:

If your car is still financed, this type of cover is compulsory. It’s more expensive, but it’s the best insurance you could get. 

Even if your car is fully paid up, it’s worth keeping. Comprehensive insurance covers the following: 

• The damages to your car if you’re involved in an accident (this excludes your excess payment); 
• Full or part of the damages to any other car(s) that were directly involved in your accident (this is included in Third Party Cover); 
• Fire that damages or destroys your car; 
• The theft and/or hijacking of your car.

This is usually the cheapest option. Third-Party Cover, however, will only provide cover for other cars, as described above. In many countries, Third Party car insurance is a legal requirement. This isn’t the case in South Africa, but it probably should be.

With this type of cover, you’re not covered for any damages to your car either, and you won’t be able to replace it if it’s completely written off in an accident. If you were in the wrong, the other car will likely - even if they have their insurance - claim against your policy.

You are also covered for fire that damages or destroys your car and the theft and/or hijacking of your car. 

It’s important to note that some policies do not cover this in full, or with higher excess payments that you’ll have to make. Therefore, it’s important to check your policy document.

Many people feel that car insurance is a blatant scam, and they consider it a bit of a grudge purchase. This is entirely understandable. A lot of people pay their insurance for years and years and never claim. Then, one day something unfortunate happens and you give the company a call. Suddenly, you realise that those policy documents are full of limitations. You feel swindled, betrayed even. 

We get it, those documents are long and dull and a lot of people don’t read them properly, but the trick with any insurance is to know what you are and aren’t covered for.

Of course, this is easier said than done. So, while you’re looking for car insurance quotes, these are some of the most important things to keep in mind:

It’s important to note that you and your vehicle are covered under your policy. This means that if somebody else has an accident while driving your car, even if they have their insurance – you’re still responsible. 

You’ll then need to submit a claim to your own insurance company. In this case, you might have to pay additional excess payments, especially if the person involved in the accident isn’t the regular driver, or your spouse.

Regardless of the type of cover you go for, the insurance company will want to know what you’re doing with the vehicle. Are you using it for full business or just commute to work and back every day? Is your place of work in one location or does it vary? Is it for private use or carpooling? 

These things all affect how insurance companies insure you, and if you’re not completely honest about this, there’s a chance your claim won’t be paid out.

According to data collected by Ctrack, the VW Polo Vivo is the most hijacked car in South Africa. 

Vehicles that are worth more, as well as those that are higher targets for theft, are going to increase your insurance premiums, simply because they are a higher risk.

Most insurance companies have a standard excess rate that you’ll need to pay. However, some additional excess costs might come into effect when certain conditions are met. These could include the time of day, the date or the location. 

Additional excess might apply if you have an accident late at night or in the early hours of the morning. If you claim within the first six months to a year within taking out the policy, you may also be liable for a higher excess. If your car is stolen or you’re involved in an accident outside of South Africa or in a high-risk area, this could also push the payment up.

Certain major life events have an impact on your monthly premiums. It’s important to notify your insurer of these events as soon as they happen, as they could also affect your claims. 

If you’ve just gotten married, your monthly premiums might go down. This is because insurance companies generally see married people as a lower risk. If you’ve just gotten a new job, the insurer will need to be updated. They need to know where your car is parked for most of the day. Likewise, if you’ve just moved to a new address, keeping the insurer in the loop needs to be at the top of your to-do list. If you haven’t updated them and something happens to your car at the new address, your claim may be rejected. 

These small details will help you get the most of your insurance, but in the end, the best way to understand everything about your cover is to read your policy documents. As soon as you get them, speak to your broker or insurer if you’re uncertain about anything.   

Well, nobody said that adulting would be easy. We’ve already looked at the many hurdles young drivers may face when applying for first-time insurance, and why this process is often so difficult, and so incredibly expensive. 

But, fret not. There is a silver lining, young Padawan, and the open road will soon be yours.

The easiest and most affordable way to get first-time car insurance is to be added to an existing policy. This is usually through somebody in your household, such as a parent or guardian, who already has a car insurance policy in place.

This person, essentially, adds you and your vehicle to their policy. As previously mentioned in part one, it’s important to be aware of ‘fronting’ in this regard, and it’s critical that you, as the regular driver, be listed as the regular driver with the insurance company.

There are many benefits (besides the obvious protection to yourself, your vehicle, other drivers and their property) to this approach. As a first-time driver, considered high risk with no reliable credit record, no driving history or history of insurance, being added to an existing policy comes with an automatic discount, because the person that owns the policy has all of this (hopefully) acting in their favour, and more.    

As a driver attached to the existing policy, you may also get to enjoy several other benefits, rewards and discounts.  

If this route isn’t an option to you, or if you’d simply prefer to do things on your own, you’ll have to brace yourself for higher premiums and you’ll likely face some hurdles along the way. There are, however, some things that you can do to overcome them, and several benefits of their own to this approach. 

Having insurance in your name is great for your driving record, for example, and the less you claim over the years, the lower your premiums will become.

Let’s take a look at what else you need to keep in mind.

There are generally three main types of vehicle coverage to choose from. These are Third Party, Third Party, Fire and Theft, and lastly, Comprehensive. We’ve gone into each of these and what they cover in-depth in the article presented below – Why Do You Need Car Insurance? – but for now, the most important thing that you need to know is that the Third Party – bottom tier – is the most affordable and bare essential type of insurance, while Comprehensive is the most expensive.

If you absolutely couldn’t afford to replace your valuable, brand new vehicle in the event of theft or an accident, Comprehensive is the best option. If your car isn’t all that valuable, though, then Third Party or Third Party, Fire and Theft should be the options you’re looking at. At the very least, these will pay for damages to other people’s property that you couldn’t normally afford.

But, more on this topic later. 

Insurance companies charge higher premiums for certain vehicles. Cars which are expensive to repair, largely to do with the availability of spare parts, will naturally incur higher premiums. 

Likewise, insurers take a look at the power of the engine (faster cars lead to faster driving), car modifications (such as alloy wheels and body kits), the presence of alarm or tracker systems, and the popularity of that particular vehicle among thieves. 

If you want lower premiums, it’s wise to choose a more affordable vehicle to insure. It may not be flashy, it may not be fast, but it will save you money in a multitude of ways, and likely reduce the risk of hijacking or theft.

We’ve covered what insurance excess is, and exactly how it works, in the article presented below – Excess, Understanding Why You Pay It – which is an important read for all insurance policyholders. 

For now, know that by choosing to pay a higher excess in the event of having to claim is one of the options available in lowering your monthly premiums. What this means, essentially, is that if you’re involved in an accident or your car is stolen, you will have to pay a higher-than-usual excess when you claim, and in exchange, you get lower monthly premium rates. 

Payless month-to-month, but pay a lot more later.

The problem with this, of course, is that you’ll need to have this higher excess on hand in that event, and you’ll need to be able to afford it. Younger drivers with no real disposable income may struggle to pull this off. Statistics aren’t in your favour either, showing that a great percentage of young drivers will claim within the first year of driving. So, that big old excess may need to be paid sooner than you’d hoped. 

Likewise, you can also elect to pay higher monthly insurance rates in exchange for a lower excess.

There are several other things that you can do. One of these is to take an advanced driving course before applying for insurance. Not only will this greatly increase your confidence and skill behind the wheel, but it also shows insurers that you know how to handle your vehicle. Peace of mind goes a long way toward lower premiums.

You can also add a low-risk driver, such as a parent, as your second driver (again, not your main driver). An older driver is more experienced on the road, and if they have a good track record themselves, their presence will certainly aid your cause. 

Adding extra safety features to your vehicle (or if it didn’t have any to begin with) such as an alarm, tracker or immobiliser will also lower your premiums. Avoid flashy modifications or expensive sound systems. Avoid the VW Polo Vivo, or any other vehicle high on the common criminal wish-list.  

Remember that insurance will always be cheaper when you park your car in a safe place, such as a locked garage. If you don’t drive it all that often, or in heavy traffic, or long distances through high-crime areas, this all minimises risk.  

Many insurers will also allow you to pay your premiums per year, instead of month-to-month, and it’s advisable to do this if you can afford it. The savings on that monthly interest you’ll be paying, otherwise, is nothing to be laughed at. 

Lastly (and we said we would come back to this later), it’s important to remember that the cheapest insurance options aren’t always the best. They’re often very cheap for very good reasons, so never look at the price tag alone. Don’t sacrifice quality of cover just to save a few extra bucks. It’s always best to base the type of insurance you’ll go for, and which company you acquire it from, on your specific, individual needs. 

We would advise that you compare insurance quotes, shop around, and speak to a knowledgeable broker about your needs and financial plans. 

Our Gurus are here to guide you, absolutely free of charge. Ask a thousand questions, ask a thousand more, and don’t make a final decision until you are 100% confident in your choice.