Many individuals opt to forgo car insurance, perceiving it as too costly for infrequent use. However, they may overlook the potential complications in the event of an accident without insurance coverage. This article delves into some of the top car insurance options in South Africa.
The Automobile Association of South Africa recently reported that, according to their findings, “up to 70% of the 11 million registered vehicles in SA are uninsured.”
Everything You Need to Know About Getting Car Insurance in South Africa
What is Car Insurance?
Car insurance is a policy purchased by vehicle owners to mitigate the financial impact of vehicular damage resulting from accidents and other incidents causing a loss in the vehicle’s value. Policyholders pay premiums to maintain coverage, and in return, the insurer bears a portion of the costs for property and/or individual damages in unforeseen situations.
The premium amount depends on factors such as age, driving experience, gender, violation history, and the purpose of vehicle use. There are two main categories of vehicle use: private and business. Private use involves driving to work, weekend getaways, shopping, and school pickups, while business use includes visits to office sites or client locations. Insurers assess the purpose of vehicle use before approving insurance applications, with business-use cars typically incurring higher premiums due to more frequent utilization.
The extent of coverage provided by the insurer depends on the type of policy chosen. Comprehensive insurance, although more expensive, offers broader coverage compared to third-party policies with limited coverage. It’s crucial to carefully review policy details, including coverage, schedule, terms and conditions, and potential exceptions.
How Car Insurance Works
In the event of an accident, policyholders can file an insurance claim by paying the required excess fee for application processing. The amount of the excess fee is based on the premium amount and the agreed-upon value at the contract signing.
Insurance companies determine the payout based on factors outlined in the policy, such as the age, make, model, and condition of the insured vehicle. Car insurance can cover property damage to the insured vehicle and other vehicles, as well as bodily injuries or death resulting from vehicular accidents.
There are limitations to the coverage, and if repair costs exceed a certain percentage of the car’s current value, insurers may declare it a write-off. For instance, if a car with a retail value of R100,000 incurs damage costing more than 60% of its value, the insurer may write off a check for R100,000 (minus excess fees) and take possession of the damaged vehicle.
The insurance payout amount depends on the policy type. “Market value” policies consider the average of retail and trade values, which might not be sufficient for acquiring a brand-new vehicle. Therefore, it’s advisable to choose a policy that insures the vehicle for its “retail value.”
Types of Car Insurance
While car insurance might seem expensive, various policy options cater to different budgets. In South Africa, the two main types are third-party and comprehensive insurance.
Comprehensive Car Insurance:
This type covers injuries or damages caused by the insured vehicle to other people or property. It also includes coverage for hijacking, theft, and selected force majeure events such as fire, explosions, flood, and more. Comprehensive policies, with extensive coverage, tend to be more expensive. Variations, like “Pay-As-You-Drive,” offer full coverage based on the time spent driving, making it affordable for infrequent drivers.
Third-party Car Insurance:
This option provides limited coverage for damages or injuries caused by the insured vehicle to a third party. While it covers hospitalization costs, death benefits, and property repairs, it does not include coverage for the insured vehicle, regardless of the damage extent. Third-party policies are flexible, allowing the addition or removal of supplementary benefits to adjust monthly premiums. Some policies, like “total loss” insurance, cover losses due to hijacking, fire, and theft, excluding damages from accidents.
The Cost of Car Insurance
Monthly premiums are calculated as a percentage of the insured vehicle’s value, factoring in discounts and loadings.
Discounts:
- Location: Higher discounts are possible in low-risk areas.
- Security: Additional security measures, such as a tracking system, can reduce premiums.
- Claims: A history of no claims or low claim occurrences results in larger discounts.
- Excess: Opting for a higher excess fee lowers monthly premiums.
Loadings:
- Vehicle Use: Business-use cars typically have higher premiums than those for private use.
- Driver’s Age: Younger drivers face higher premiums due to perceived higher risk.
- Driving Experience: More experienced drivers enjoy lower premiums.
- Value-added Services: Optional features like roadside assistance and vehicle hiring can be omitted for lower premiums.
Tips for Looking for Car Insurance Quotes in South Africa
- List Down Providers: Compile a list of insurance providers to contact and obtain detailed quotes from at least three to explore various options.
- Thoroughly Read Policies: Low-premium policies may fall short in covering claims, so carefully review policy coverage, hidden charges, and excess payments.
- Check Insurer Reputation: Investigate the insurer’s reputation through friends, online forums, and review sites. Ensure the company is a registered Financial Services Provider in South Africa.
- Clarify Policy Details: Seek clarification on unclear clauses or terminologies before committing to any contract.
- Balance Premiums and Excess Fees: Decide between lower premiums and higher excess fees based on your financial situation.
- Beware of Excess Fees: Be cautious of insurers charging large excess fees, as they may offset the benefits of low premiums.
Questions to Consider When Looking for Affordable Car Insurance:
- Turnaround Time for Claims Processing
- Excess Fees for Loss and Damage
- Calculation of Excess Fee (Flat Rate or Percentage-Based)
- Penalties for Claiming Within a Specific Period
- Rules for Claiming When Not the Driver
- Impact of Age on Insurance Coverage
- Coverage for Full Retail Value or Resale
- Limitations on Vehicle Usage
Top Car Insurance Companies in South Africa
The following are some of the best and most popular car insurance providers in South Africa, along with key features and contact details:
- MiWay Car Insurance:
- Claims processed online or via mobile app
- Free roadside assistance
- Contact: 0860 64 64 64
- Outsurance Car Insurance:
- Hand-picked vehicle repair service provider for 12 months
- Fast claim turnaround
- Contact: 061 306 081
- Discovery Car Insurance:
- Four comprehensive plans
- Flexible excess fees
- Contact: 0860 751 751
- Santam Car Insurance:
- Free SOS service
- Up to 6 take-me-home services yearly
- Contact: 0860 444 444 / 0860 505 911
- iWYZE Car Insurance:
- Trauma counseling
- Emergency medical and accommodation expenses
- Contact: 0860 63 33 39
- Hollard Car Insurance:
- Possible reward for no claims
- Transportation, storage, and towing services included
- Contact: 0860 123 32 79
- Budget Direct Car Insurance:
- 24/7 hotline for claims
- New-for-old car replacement program
- Contact: 1800 288 149
- PMD (Prime Meridian Direct) Car Insurance:
- No excess fees for base benefits
- No increase in monthly premiums
- Contact: 011 745 7800
- FNB Car Insurance:
- Personal claims broker
- Free roadside assistance
- Contact: 0860 328 328
- Momentum Car Insurance:
- Free roadside assistance
- Claims processed via mobile app
- Contact: 0860 006 784
- Standard Bank Car Insurance:
- 24/7 hotline
- Free roadside assistance
- Contact: 0860 123 000
- First for Women Car Insurance:
- Free roadside assistance
- Automatic medical coverage of up to R500
- Contact: 0861 00 33 28
- Old Mutual Car Insurance:
- Free roadside assistance
- Fast turnaround time
- Contact: 0860 468 378
- Dial Direct Car Insurance:
- Off-road car insurance available
- Flood and fire damage covered
- Contact: 0861 007 367
- ABSA Car Insurance:
- Free roadside assistance
- Option to cover fire, theft, and weather
- Contact: 0860 100 876
Check Also A Guide to Capitec Vehicle Insurance
Top Car Insurance Companies and Features:
- Balanced overall complaints, high ratings, quick response times, and emergency support.
- Comprehensive cover under Momentum Priceless and Momentum Envoy solutions.
- Priceless covers personal liability, damages to motor vehicles, and optional add-ons.
- Envoy covers the same vehicles as Priceless plus collector’s cars.
- Bonus features include Safety Alert, Safety Bonus, and Momentum Assist.
2. MiWay:
- Optional coverage for liability, intentional damage, theft, fire damage, and vehicle windows damage.
- Comprehensive cover for theft, hijacking, accidents, and selected optional damages.
- 24/7 roadside assistance, WeDrive service, online policy management, and online claims submission.
- Flexible options for insuring vehicle values.
3. Discovery:
- Three insurance plans: Essential, Classic, and Purple.
- Essential covers personal liability, roadside assistance, trauma counseling, and rewards for safe driving.
- Classic includes additional features like trip monitor, direction assist, and higher rewards.
- Purple covers vehicles worth R5 million and above with exclusive benefits.
4. Outsurance:
- Comprehensive cover with 24/7 roadside assistance, guaranteed cost premium, fixed excess, liability cover, and key replacement.
- Essential car insurance with customizable plans.
- Motor warranty insurance covering unexpected damages.
- Bonus features like OUTbonus for premium paid back after claim-free years and quality-assured repairs.
5. Sanlam:
- Comprehensive cover for accident damage, emergency repairs, tire damage, windscreen damage, and more.
- Short-term car insurance covering a specified period.
- Comprehensive cover for injury, financial loss due to hijacking or theft, limited fire and theft coverage.
- Additional plans for personal liability, specified accessories, international coverage, and car hire.
Cheap Car Insurance Quotes for Women
Women typically enjoy lower premiums for car insurance due to statistically fewer accidents compared to men. Female drivers often exhibit more cautious driving habits, especially when transporting children. Some insurers, like First for Women, cater exclusively to female applicants, offering various insurance types and coverage.
Conclusion
When seeking car insurance in South Africa, it’s crucial to look beyond low premiums and consider the full policy details. Relying solely on online quote platforms may lead to future issues, making it advisable to consult a knowledgeable and registered broker for a comprehensive understanding of the chosen car insurance policy.
Car insurance is a necessary investment, providing financial protection for injuries, damages, and related expenses resulting from accidents. The monthly premium is a worthwhile expense for the security it offers, emphasizing the importance of securing coverage before hitting the road.