We help you by making the complicated car insurance terminology easy to understand. 1. Do I Need Car Insurance? In South Africa, it is not a requirement by law however; car insurance is highly recommended to insure the safety of yourself, your vehicle, as well as other drivers or persons on the road. Car insurance essentially provides you with monetary compensation if you are involved in an accident. This insurance, depending on package, may cover damage to property, injuries caused to other drivers, passengers, or pedestrians in the event of an accident. If you don’t have car insurance, you would be financially responsible for any damage incurred by you to other persons or property, not to mention your own vehicle. 2. What Type of Car Insurance Should I Get? There are three main types widely available from South African insurance companies. • Third Party Insurance: This type of insurance is normally the cheapest. It involves your insurer financially compensating another driver or person with either property damage or injury. However, this type of insurance does not cover you or your vehicle. • Third Party, Fire, and Theft Car Insurance: This includes additional cover if your car is involved in a fire, is stolen and covers any third party claims as mentioned above. • Comprehensive Car Insurance: This is the most expensive option in car insurance. This policy would repair or replace your car in spite of who was at fault. This type of policy may also include additional cover such as medical expenses, compensation for legal ramifications and cover for any lost or damaged personal items in your car at the time of the accident. 3. What Is My Insurance Premium Based On? The main factors affecting the price of your car insurance premium include: • Make, model and age of your car • Storage of the car (eg. Off-road parking) • How many previous claims you have made • Driving offences (Drunk driving, speeding fines etc.) • Driving experience (New drivers usually have higher premiums) 4. Useful Terminology • No-claims bonus/discount- For every compounding year you have your car insured and you don’t make a claim, you may either receive a discount for the following year’s premium or you may receive a lump sum after a certain period of time (insurer dependent). • Excess: You need to pay this amount for the cost of filing any insurance claim and unfortunately, it doesn’t reflect much on quotes. Standard feature with all insurance providers, however the amount is dependent on the insurer and your premium. Try varying your excess levels in order to find the best quote when comparing premium packages. • Breakdown Cover: Some premiums include roadside assistance, home assistance, or vehicle recovery, look out for this feature when comparing quotes. Carmakers may additionally offer a branded cover when you purchase their car. ©Diane Moalem for Compare Guru