Car insurance, explained without the sales pitch
Three levels of cover, one of which most people should not buy. What your policy pays if the car is written off, the excesses nobody mentions until you claim, and what actually moves your premium. Read this before you take a quote.
What you can actually buy
Start here. Choosing the wrong level is a more expensive mistake than paying slightly too much for the right one.
Comprehensive
What most people need.Covers damage to your own car as well as damage you cause to other people. Accident, theft, hijacking, fire, hail and storm. If the car is financed, your bank will insist on this and nothing less.
Third party, fire and theft
Covers damage you cause to other people, plus your car being stolen or burnt. It does not cover crash damage to your own car. Sometimes sensible on an old car you could replace out of pocket.
Third party only
Cheap for a reason.Covers damage you cause to other people and nothing else. It is the cheapest option and it is why people end up with no car after an accident that was their fault.
What catches people out
None of this is hidden. It is all in the wording nobody reads until the day they need it.
Retail, market or trade value
Your schedule says which one your payout is based on, and the difference between retail and trade on the same car is often tens of thousands of rand. Most people have never looked.
More than one excess
There is the basic excess, and then additional ones that stack on top: a young driver excess, an unnamed driver excess, a theft excess, sometimes a higher one if the car was not in a locked garage overnight.
The settlement gap
If the car is written off, the insurer pays what the car is worth, not what you owe the bank. Early in a finance agreement those two numbers are far apart and the difference is yours to pay.
Who was actually driving
Policies name a regular driver. If the person who usually drives the car is not the person on the policy, a claim can be declined, and it is a common reason for one.
What moves the price
Some of this you can change and some you cannot. Knowing which is which is most of the negotiation.
- 01
Where the car sleeps
A locked garage behind a gate is priced very differently to a street in a high-theft suburb. This is usually the single biggest factor after the car itself.
- 02
What you drive
Repair cost and theft rate, not the sticker price. Some modest cars are expensive to insure because they are stolen often or parts are scarce.
- 03
Your excess
Agreeing to carry more of a claim yourself lowers the monthly premium. Only worth it if you could actually find that money the week it happens.
- 04
Who drives it
Age and licence history of the regular driver. A young driver on the policy moves the price more than almost anything else.
- 05
Security
An approved, active tracker can be a discount, and on some cars it is a condition of cover rather than an option.
What to ask before you sign
Ask these, and get the answers in writing. A good insurer will answer all of them without hesitating.
- 1Is my payout based on retail, market or trade value?
- 2List every excess that could apply to a claim, not just the basic one.
- 3Who is the named regular driver, and what happens if someone else was driving?
- 4Is a tracker required, or is it optional with a discount?
- 5Am I covered if the car is being used for deliveries or lifts for money?
- 6What is not covered at all?
Questions people ask
- Is car insurance compulsory in South Africa?
- No. There is no legal requirement to insure a car here, which is why a large share of the cars on the road are uninsured. If the car is financed, though, your bank will require comprehensive cover as a condition of the loan.
- What is the difference between excess and premium?
- The premium is what you pay every month to hold the policy. The excess is what you pay towards a claim before the insurer pays anything. A higher excess usually means a lower premium, and a bigger bill on the day something happens.
- Will my premium go up if I claim?
- Usually yes, at renewal, and you may also lose a no-claim benefit if you had one. This is why very small claims are often not worth lodging once you account for the excess as well.
Ready to see what it costs?
Tell us once, and you choose which insurers get your details. No cold calls from anyone you did not pick.