Car insurance is a crucial aspect of owning and driving a car in South Africa. Choosing the right car insurance plan can be a daunting task, but it is essential to ensure that you are protected in the event of an accident or any other damage your vehicle might sustain. Are you looking into your insurance options because you’re searching for a new car? Find a new ride on Auto Mart today.
In this guide, we will explain the basics of vehicle insurance in South Africa and provide tips on how to choose the right coverage for your needs.
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How Does Vehicle Insurance Work?
Vehicle insurance provides financial support in the event of an accident, theft, or other damages a vehicle might obtain. When you purchase insurance, you pay a monthly premium to your insurance company, and in exchange, the insurance company agrees to pay for any damages or losses that occur as a result of an accident, theft, or whatever else is covered in the agreement. The amount of coverage you receive depends on the type of insurance you choose. It’s important to note that it is not a legal requirement to have vehicle insurance in most instances, but if you purchase one through a bank or another financial institution, you will be legally required to have insurance.
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What is Insurance Excess?
There are two types of excess: compulsory and voluntary.
- Compulsory excess is determined by your insurer and cannot be negotiated, but you have the option to pay an additional amount of excess to lower your monthly premiums.
- Voluntary excess is an amount that you agree to pay when making a claim as the insured. This payment is initially made by you for any repairs that need to be carried out before your insurance company contributes their part.
To illustrate, if the damages to your vehicle total R65 000 and your excess is R10 000, your insurer will cover the remaining R55 000.
Types of Insurance in South Africa
There are three main types of vehicle insurance available:
Third-party-only insurance: Third-party insurance is the most basic type of insurance. It covers damages or injuries to third parties in the event of an accident caused by the insured driver.
Third-party, fire, and theft insurance: This type of insurance provides coverage for damages or injuries to third parties as well as protection against theft or fire damage to your own vehicle.
Comprehensive insurance: Comprehensive insurance offers the most comprehensive coverage and includes protection against damages or injuries to third parties, theft, fire, and damage to your own vehicle.
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How to Claim from Insurance
If you find yourself needing to submit a claim due to an accident, fire, theft or third-party incident, it's important to notify your insurer immediately and provide them with all the necessary information, including the time and location of the incident, the name and insurance provider of the other party involved, their licence number, ID number, vehicle make and model, as well as all relevant contact details.
If you find yourself in a road accident or your vehicle is damaged in any way, you will need to file an insurance claim. It's important to note that some insurers require claims to be submitted within a specific time frame, so prompt action is necessary. Be sure to have your driving licence details and policy number on hand.
Depending on your insurer, the process for filing a claim may vary. Some may require you to file the claim over the phone and later send a claim form, which must be completed and returned with supporting documents. Others may ask for the claim to be submitted online or via the insurer’s app.
Can I Drive a Car Without Insurance in South Africa?
Unless a car was bought with a loan from a bank or another financial institution, car owners are not obliged by law to obtain car insurance. That said, a number of drivers rely solely on coverage from the Road Accident Fund. This approach can have drawbacks, such as slow claims processing, uncertain outcomes, and limited coverage. It's important to note that, even though the approval % of claims is high, people can still be rejected.
The RAF has a statutory duty to pay out claims, but it does not always do so. In 2020/21, the RAF approved 83% of claims. This means that 17% of claims were rejected.
Reasons why claims may be rejected include:
- The claimant was not injured in the accident.
- The claimant was partially or fully to blame for the accident.
- The accident was not reported to the police by the claimant.
- The claimant did not submit all of the required documentation.
Who is Liable in an Accident: Owner or Driver?
In South Africa, both the owner and the driver of a car can be held liable in the event of an accident. The owner of the vehicle is responsible for ensuring that the car is roadworthy and properly maintained. The driver of the vehicle is responsible for driving safely and obeying traffic laws. If an accident occurs, both the owner and the driver could be held responsible, depending on the circumstances.
Who is Liable to Pay Damages in a Car Accident?
In a car accident, the person who is at fault is liable to pay damages. If both drivers are at fault, then the damages will be divided between them based on the degree of fault. If you have comprehensive insurance, your insurance company will cover the damages up to the limit of your policy. You will be held accountable for covering the amount exceeding your policy limit in the event that the damages surpass it.
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Tips for Choosing the Right Car Insurance
When you choose the right car insurance plan, it is essential to consider your individual needs and budget. Read out tips to help you choose the right insurance coverage:
- Determine the level of coverage you need based on the value of your car and your driving habits.
- To find out about the most favourable rates, get quotes from various insurance providers and compare them.
- Check the reputation and financial stability of the insurance company before making a decision. For example, check out reviews and testimonials from other people. It’s important to do your research before agreeing to anything.
- Consider additional benefits such as roadside assistance, rental car coverage, and no-claim bonuses.
- Read the fine print carefully and make sure you understand the terms and conditions of your policy, including any exclusions or limitations.
It is also important to review your car insurance policy regularly and update it where necessary. If your circumstances change, such as buying a new car or moving to a new area, you may need to adjust your coverage.
To choose the right car insurance plan, it's an important decision that can have a significant impact on your financial well-being in the event of an accident or theft. By understanding the different types of coverage available and following these tips, you can choose the right insurance to protect yourself, your car, and others on the road. Remember to review your policy regularly and update it as necessary to ensure that you are always adequately protected. If you’re in the market for a new car, find your new ride with Auto Mart today.