Different types of car insurance

With 60% to 70% of vehicles in South Africa uninsured and more than 800,000 accidents occurring annually, most vehicles involved in accidents are not insured. However, with different types of insurance available to consumers, even insurance with low coverage is better than no coverage.

According to the Short-Term Insurance Industry in South Africa 2022 report, vehicles are generally not insured due to affordability, people believing they will never be involved in an accident or believing they only drive short distances or do not drive often, or because vehicle owners do not realise how high vehicle repair costs are.

Barend Smit, Marketing Director of MotorHappy, a supplier of motor management solutions and car insurance options, cautions against cancelling your car insurance to cut down on monthly costs. “Driving uninsured can cost a lot more in the long run because if you’re involved in a car accident or if your car is stolen, you will be responsible for paying all associated costs. If you find that you’re struggling to pay for your insurance premiums, contact your insurance company to let them know. They might help by lowering your premiums. You can also shop around for a cheaper insurance quote.”

Knowing the different types of car insurance and their coverage provided is an important part of getting the policy that’s right for you. There are three main types of car insurance coverage in South Africa: Fully comprehensive car insurance, third party fire and theft, and third party only.

Fully Comprehensive car insurance provides the highest level of coverage against damage or third-party claims from an auto accident involving your car. It is the most expensive car insurance, but it covers you to the maximum degree, even if you're at fault in the accident, and covers your own damages and damages or financial losses you cause to a third party.

A typical fully comprehensive car insurance policy covers:

  • Damages caused by your car to someone else’s property
  • Damages to your car due to any covered incident like fire, theft, and vandalism
  • Accidental damages
  • Damage or stolen

Although Fully Comprehensive Car Insurance is already the highest level of coverage, you can also include optional extras to meet your specific coverage needs. “This type of insurance coverage meets the coverage requirements if you are financing or leasing your car,” Smit explains.

Third-Party fire and theft car insurance covers you if you cause any damage to another person or their property as well as any damage caused by a fire or if your car is stolen. It doesn’t cover you if your car is damaged in any incident other than fire and theft.

 “Third-Party fire and theft car insurance is not usually a good solution for newer and high-value cars,” Smit says.

The final type of insurance, third-party liability car insurance, protects you only in an incident when you cause damage to third-party property or a bodily injury to another person. It doesn’t cover you against any damages to your car or if your car is stolen.

Smit says this type of insurance is best if you drive a car that is fully paid off and you have enough funds to replace the vehicle if it is stolen or damaged.

You can save money on your car insurance premiums as your car gets older, if you move to a different neighbourhood, and if you drive your car less. Therefore, it makes sense to shop around for a new car insurance quote every year. MotorHappy sources up to seven quotes from some of South Africa’s leading insurance providers, making it easier than ever to shop around for the best priced car insurance for your budget and your needs.