Many people forego getting a car insurance because they think it’s too expensive and it won’t be used often. What they don’t see is how much of a hassle it will be if they get into an accident and they don’t have any kind of insurance to cover for their losses. This article looks at some of the best car insurance in South Africa.
The Automobile Association of South Africa released a statement saying that based on their findings “at most 70% of the 11 million registered vehicles in SA are uninsured”.
What is Car Insurance?
A car insurance is a policy bought by vehicle owners to help them lessen the financial impact of vehicular damage due to accidents and other incidents that would result in a loss in value of the vehicle. Insurance holders pay a premium to maintain the insurance and in return, the insurer shoulders a portion of the cost needed to pay for the damages done to properties and/or individuals in the uneventful situation.
The premium paid on the car insurance depends on the age, driving experience, gender, and violation history of the insured. How you use your vehicle also plays a part in how much premium you’ll pay and what your insurance company will cover in the policy.
There are two ways a vehicle can be used. The first one is for private use. This is when you use your vehicle to drive to work and return back home. You also use it on weekend getaways, shopping, and picking up kids from school. All uses of the car related to your private life are counted under this category.
The other one is for business use. The use of your car to visit other office sites or client locations is categorized under business use.
Insurance providers will look at the purpose of vehicle use before approving your car insurance application. Cars for business use are typically charged with higher premiums because of how often they’re utilized in your everyday activities.
The degree of responsibility assumed by the insurer will also depend on the type of policy you apply for. Comprehensive insurances are more expensive compared to third-party policies with limited coverage. This is why you have to thoroughly read the fine print and take note of the important points on the policy like the insurance coverage, schedule, terms and conditions, and possible exceptions.
How Car Insurance Works
When you get into an accident, you can file for an insurance claim by paying the excess fee needed to process your application. This amount will depend on how much premium you’re paying and on the value agreed when you signed the contract policy.
The insurance company will pay out an amount based on several factors that determine the car’s value before the claim was submitted. These factors are documented in the policy so make sure you take note of them. Usually, the age, make, model and condition of the vehicles are the main factors that determine the value of the vehicle being insured.
A car insurance can cover property damage done not only to your car but also to other vehicles. The same goes for bodily injuries (or death) caused by vehicular accidents to involved parties.
Of course, there are limitations on how much damage your car insurance can cover. If the repair cost exceeds a certain percentage of the car’s current value, insurers will typically proceed with an insurance write-off.
For example, you have a car with a retail value that’s around R100 000. While driving your car, you got into an accident and it was badly damaged. An engineer or an insurance assessor will evaluate how much the damage will cost the insurance company. If reparations will cost more than 60% of the car’s retail value, the insurance company will typically proceed with writing off a check for you that costs R100 000, minus the excess fees. In exchange, the insurance company will take possession of your damaged car.
The value will depend on the policy you’re getting. If it says ‘market value’, that means the amount will be based on the average of the retail value and the trade value. This is usually not enough to get you a brand new vehicle similar to the one you just exchanged. To be safe, make sure you’re getting a policy that insures the vehicle for its ‘retail value’.
Getting car insurance is not an option but more of a necessity. You won’t know when you’ll be dealt with a bad hand so it’s better to have a legal and financial safeguard to back you up.
Types of Car Insurance
Getting car insurance may be too much for your pocket which is why there are many types of policies you can choose from. There are two main types of car insurance in South Africa: third party and comprehensive.
- Comprehensive Car Insurance
This type of car insurance in South Africa covers injury or damage caused by your vehicle to other people or property. It also covers hijack, theft (see some of the most stolen cars in South Africa), and selected force majeure like fire, explosions, flood, hurricane, earthquake, typhoon, hailstorm, and similar situations as stated in your policy. Vehicular damage caused by riots, terrorist acts, and strikes are not typically included but this depends on the policy offered by your insurer. Due to its wide coverage, comprehensive policies are the most expensive to maintain.
Many insurance providers offer variations to the comprehensive insurance type to allow flexibility and affordability.
The Pay-As-You-Drive option allows you to enjoy the full coverage of a comprehensive insurance type while you’re on the road. Charges on this are based on how much time you spend in riding your vehicle. This is an affordable choice for those who don’t use their vehicles often.
Another comprehensive but limited insurance policy variation covers the damages you caused to another vehicle in case of an accident. However, the damage on your own car isn’t covered in this kind of policy. Loss due to fire and theft are the only occurrences covered by this type of comprehensive insurance.
- Third-party Car Insurance
Expect limited coverage from the most affordable vehicle insurance in South Africa.
Third-party car insurance covers the damage or injury you’ve cost to a third party due to an accident. Hospitalization costs, death benefits, and property reparation are often covered in this type of car insurance. However, your vehicle will not be covered in any way, no matter how big or small the damage is.
Third-party car insurance policies are also flexible in a way that you can either add or remove supplementary benefits to adjust the amount you pay for your monthly premium.
There’s also a ‘total loss’ insurance policy that covers only losses due to hijacking, fire, and theft. Damage from accidents is not covered in this type of third-party insurance policy.
The Cost of a Car Insurance
Your monthly premium is calculated as a percentage of the insured value of your vehicle. There are 2 main factors that affect the computation of your premium: discounts and loadings.
- Location: You may get a higher discount on your premium if you live in an area with a low accident risk.
- Security: This pertains to the extra security measures you’ve taken to protect your vehicle from damage or loss. Installing a tracking system on your car, for example, may reduce your premium due to the added security measure.
- Claims: If you have a ‘no-claim’ history or have a low occurrence of claiming insurance, you’ll get bigger discounts on your premium.
- Excess: The higher the excess fee you’re willing to pay, the lower the monthly premium you’ll pay.
- Vehicle use: How you use your vehicle affects your monthly premium. Cars for business use typically have higher premiums compared to those intended for private use.
- Driver’s age: Younger drivers are seen as high-risk individuals which is why insurers require them to pay higher premiums.
- Driving experience: The time you’ve had your licensed affects your monthly premium. The more experienced you are, the lower the premium you’ll be paying.
Value-added services like roadside assistance and vehicle hiring are optional features that you can let go in exchange for lower monthly premiums. The price and coverage of these features vary per insurer, so make sure you consult them about these features if you want to include them in your policy.
Young drivers are charged with higher monthly premiums since they pose a higher chance of filing a claim. The reason behind this is the lifestyle, driving experience, and general behavior displayed by the younger generation of drivers compared to older ones. They usually attend late night parties, drive at faster speeds, and exhibit delinquencies like drunk driving compared to older drivers.
Maintaining an insurance is an ongoing commitment that needs to be monitored at least annually. The value of a vehicle will depreciate through time which is why you need to update your insurance policy every year to factor in the necessary adjustments.
If you don’t update your policy records, you’ll be paying premiums based on the original value of the vehicle even though its current value has diminished. Even if you’re paying in excess, your insurer will only pay out insurance money based on the current discounted value of the vehicle. It’s a waste of money so make sure you update your car value every year. Make time to communicate this to your insurer to adjust the premium you’re paying.
Tips in Looking For Car Insurance Quotes in South Africa
- List down the car insurance providers you want to contact. Get detailed quotes from at least three providers to give yourself a wide range of options.
- Policies with very low premiums often fall short of covering the claims of their clients. If you go for the most affordable policy, make sure you thoroughly read the fine print. Check for policy coverage, hidden charges, and ‘in excess’ payments.
- Check the reputation of your insurer. Ask your friends, find online forums, and look for review sites that will give you details on the performance of your chosen insurer. Make sure that the insurance company is a registered Financial Services Provider in South Africa.
- Ask your insurer about unclear clauses or difficult terminologies that confuse you. Before committing to any contract, make sure you understand every bit of the policy to avoid problems in the future.
- Choose between having lower premiums or lower excess fees. Your decision will depend on your financial situation. If you have a good amount of money on hand, it may be best to keep a low premium and just pay a bigger excess fee in case of an accident. On the other hand, if you think you’ll have trouble paying a lump sum for the excess fee, it’s best to add a little extra to your monthly premium. This will make payments easier for you without exceeding the budget.
- Be wary of insurers who charge large amounts of excess fees. This pertains to the amount you pay to get your claim approved in case of legitimate damage to your vehicle, regardless of who caused the loss in value. Oftentimes, a company that offers a low premium requires a significant amount of excess fee when claiming your insurance. Many policyholders get surprised by the amount that it feels like they’re the ones paying for most of the damage and not the insurer.
Questions to consider when looking for an affordable car insurance policy:
- How long is the turnaround time in processing claims?
- How much are the excess fees? Are the fees for loss and for damage different?
- How is the excess fee calculated? Is it a flat rate or is it percentage-based?
- Any penalties for claiming the insurance within 6 months or a year after it was initiated? How much will these penalties cost?
- What are the rules for claiming when you’re not the one driving your car and it got into an accident covered by the policy?
- How does age affect insurance coverage?
- Is the car covered for its full retail value or resale?
- Any limitations on when and where the vehicle can be taken on the road?
Top Car Insurance Companies in South Africa
There are a lot of car insurance providers in South Africa. We’ve compiled the best and most popular among them and listed the important details you need to know about their services.
|Service Provider||Features||Contact Details|
|MiWay Car Insurance||0860 64 64 64|
|Outsurance Car Insurance||061 306 081|
|Discovery Car Insurance||0860 751 751|
|Santam Car Insurance||0860 444 444 / 0860 505 911|
|iWYZE Car Insurance||0860 63 33 39|
|Hollard Car Insurance||0860 123 32 79|
|Budget Direct Car Insurance||1800 288 149|
|PMD (Prime Meridian Direct) Car Insurance||011 745 7800|
|FNB Car Insurance||0860 328 328|
|Momentum Car Insurance||0860 006 784|
|Standard Bank Car Insurance||0860 123 000|
|First for Women||0861 00 33 28|
|Old Mutual Car Insurance||0860 468 378|
|Dial Direct Car Insurance||0861 007 367|
|ABSA Car Insurance||0860 100 876|
Momentum Insurance is first on the least with the best balance of least overall complaints, high ratings as well as response times and support during emergencies. Car insurance from Momentum Insurance has the following features:
- Comprehensive cover under their Momentum Priceless and Momentum Envoy solutions.
- Momentum Priceless option covers personal liability and damages to motor vehicles. Personal liability coverage includes financial loss arising from fraudulent activities as well as an optional add on that includes exposure to financial loss and legal matters arising from injury, death and damage to property caused by your vehicle. The motor vehicles covered include trailers, motorcycles, caravans, and watercraft. These vehicles are covered for windscreen repair as well as car sounds system repair and replacement in case you lose something or it spoils.
- Momentum Envoy, the more exclusive of the two, covers the same vehicles as Momentum Priceless plus collector’s cars. Your vehicle can be assessed at your place and returned to you after any repairs on this cover.
- Momentum Insurance three bonus features to their insurance. These come 3 standard with Momentum Envoy, but are optional add-ons on on Momentum Priceless. The first is an alarm button called Safety Alert on the Momentum App. Second is 30% cash back each year for safe driving; a feature called Safety Bonus. Last benefit is 24/7 assistance all year round for roadside damage, medical and legal emergencies called Momentum Assist.
MiWay Insurance came second. MiWay car insurance has the following features:
- Optional coverage for liability to third parties, intentional damage to your car, loss due to theft, damage from fire and vehicle windows damage.
- Comprehensive cover that includes cover for theft, hijacking, damage from accidents, as well as damage from fire, explosion and natural disasters. It comes with 24/7 roadside damage emergency support, MiWay’s WeDrive driving service, ability to manage your policy online, and the ability to submit claims online. It also includes the cover for things that are optional damages and liability.
- You can insure your vehicle’s retail value, trade value, market value or special agreed value.
Discovery Insurance is third, it offers the following car insurance covers:
- Discovery has 3 insurance plans. These are Essential Plan, Classic Plan and Purple Plan.
- Essential Plan cover includes personal liability for accidental injury or damage, assistance for roadside damage, trauma counselling support, up to 25% fuel back reward for safe driving, up to 25% Gautrain spend back as well as no excess for accidents caused by a third party.
- Classic Plan includes personal liability for accidental injury or damage, assistance for roadside damage, trip monitor, direction assist, trauma counselling support, up to 50% fuel back reward for safe driving, up to 50% Gautrain spend back, as well as no excess for accidents caused by a third party.
- Purple Plan cover is for those insured for vehicles worth R5 million and above. It has the same features as the Classic Plan with some add-ons. The add-ons include ability to insure multiple vehicles, an exclusive Discovery Insure Service Executive assigned to you, car hire for up to 30 days when you claim, and replacement value of car of it is less than 24 months old.
Outsurance Insurer, at fourth, provides car insurance with the following features:
- Comprehensive cover with 24/7 roadside damage assistance, 12 months guaranteed cost premium, a fixed excess, up to R5 million liabilty cover, cover for car key replacements, and cover for medical expenses following accidental injury.
- Essential car insurance cover lets you choose a plan that is best suited for your vehicle.
- Motor warranty insurance covers the cost of repair from unexpected damages.
- Bonus features including 10% premium paid back after three claim free years with OUTbonus and Outsurance quality assured repairs.
The final insurer in this list is Sanlam. Sanlam Insurance has the following features:
- Comprehensive cover for damage due to accidents including emergency repairs, damage to tyres, damage to the windscreen, damage of the vehicle’s entertainment system, tow away if required, safeguarding during repairs, delivery after repairs, damage of your vehicle keys and cost of alternative means to move around within 30km of your residence following accidental damage to your vehicle.
- It’s car insurance is classified as short-term. This means they will cover your vehicle for a short specified period only.
- Comprehensive cover for injury due to accidents including medical expenses for passengers, medical expenses for third parties, compensation for permanent disability, and compensation for death within 90 days as a result of injuries.
- Additional coverage for valuation of your vehicle which usually comes free prior to the starting date of the policy.
- Comprehensive cover for financial loss as a result of hijacking or vehicle theft.
- Limited cover for damages due to fire and theft.
- Alternative plans that offer personal liability cover, cover for specified accessories, cover in additional countries, and cover for vehicles used in car hire.
Cheap Car Insurance Quotes for Women
Women typically pay lower premiums for their car insurance than men. Statistics say that women drivers tend to get into much fewer accidents compared to men, which is why they pose lesser risks for insurers compared to male insurance holders.
Oftentimes, women also drive with their children in the car, making them extra cautious on the road. This means they obey traffic rules better and ensure all safety precautions are in place before they hit the road.
Women belonging to a certain age bracket even get better offers from specialized insurance providers. First for Women is one of them. They’re an insurance company that caters solely to female applicants and offers a wide variety of insurance types and coverage.
Take note that when looking for a car insurance in South Africa, a lower premium doesn’t always mean its better. Relying your decision solely on the results from online quote platforms may cause problems in the future since you may not have the full view on what the whole policy entails. What you should do instead, is consult a knowledgeable and registered broker to clarify all items on the car insurance policy you’re looking into.
Getting a car insurance helps you cover the financial cost of injuries, damages, and other expenses associated with vehicular accidents and similar circumstances. The protection it provides is worth the monthly premium you’ll be paying so make sure you get one before you hit the road.