An overview of Insurance Companies in South Africa
Below we will provide a general overview of insurance companies in South Africa.
Owning and driving a car is one of those life’s pleasures. One of the downsides is the inevitably of a mishap such as your car getting stolen and having to replace it which can cost a lot of money. That is why it is important to take out short term car insurance from regulated insurance companies in case of theft, accidents, or injuries to the driver, passengers and also to third parties or third party property. Unfortunately, the levels of theft in South Africa are very high as well as carjacking. As if this was not enough, repair bills for accident damages have risen dramatically. Having insurance alleviates the burden of much of the costs depending on the cover you take out, and above all gives you peace of mind. A part of this peace of mind is knowing that the insurance industry is regulated by the Financial Services Board and that you have selected a reliable insurance company and one that will be there when you need them.
The Leading Insurance Companies in Short-Term Car Insurance
There is a wide choice of insurance companies in South Africa with above 40 insurance companies offering short-term car insurance cover to choose from. It is said that the biggest insurance companies are Old Mutual (which is the oldest insurance company), Hollard, OUTsurance, Momentum and Sanlam. Other major insurance companies include AA Insurance, AIG, Alexander Forbes, Dial Direct, Hippo Insurance, Miway, PPS, and Regent. It is interesting to note that some of these insurers are owned by the same parent company. For example the Telesure Group owns several insurers such as Dial Direct, AA Insurance and Hippo insurance as well as other insurers. Surprisingly, this is a fact that many people are now aware of and when they compare insurance quotes, within these companies they think that they are getting quotes from different companies when in fact these are all owned by the same mother company.
See our List of Insurance Companies in South Africa for some great reviews about each company.
The Changing World of Car Insurance and its effect on the car insurance companies
The world of Insurance Companies has been affected by new legislation ultimately designed to protect the consumer, and especially in the car insurance sector to improve claims procedures. The implementation of some of the legislation, such as SAM – Solvency Assessment and Management, will mean a continuing consolidation and merger of insurance companies. It may also mean that administrative costs for some of the smaller companies may become too heavy as they struggle to become compliant with the new rules and regulations.
There have also been changes in the marketing insurance cover and more companies are offering on-line services, which were first offered by Dial Direct. Several insurance companies have also formed alliances with banks and what is called Bancassurance enables accessing insurance services through some of the banks.
All these insurers also offer other insurance and financial services, and the new rules and regulations that have become law in recent years aim to give greater protection when you take out short-term car cover from any of those insurance companies that have implemented, or that are in the process of implementing, policies that are compliant with these new regulations.
Rules and Regulations Governing Insurance Companies
In South Africa, insurance companies are regulated by the Financial Services Board and there are four laws that regulate the insurance sector: The Short-Term Insurance Act 53 of 1998 (STIA), the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS), the Policyholder Protection Rules 2004 (PPR) and the Financial Services Ombud Schemes Act 37 of 2004 (FSOS).
STIA stipulates that short-term insurers have to be registered with the Financial Services Board, and sets out the rules that insurers have to follow. The FAIS sets out the general code of conduct of insurance providers and determines who is ‘Fit and Proper’ to provide such services. The PPR provides protection for consumers. The FSOC sets provisions for Ombudsman for Financial Service Providers in case of customer complaints against providers.
Types of Car Insurance
The insurance companies offer different types of car insurance policies to suit customer needs and budgets. The best type of insurance is comprehensive cover which insures you against accidental damage, theft, and hijack, damage and injury to other people in case of an accident and more – of course, this is also the more expensive type. The minimal type of car insurance cover is balance of third party which only covers damage to the other people’s cars in an accident.
Cost of Insurance
All insurance companies will ask for information about the person or people being covered as well as details about the car, as this information will have bearing on the premium they will quote (these details will effect how much you will pay for your insurance). This information will include the type of car and age; the age and driving history of the driver. Obviously, the more powerful and faster cars and young inexperienced drivers will be considered to be more risky and therefore will command high premiums. Older and more experienced drivers as well as family cars will in most cases qualify for lower premiums. Discounts for a driver with a history of no-claims against his past insurers are available from most insurance companies as well as voluntary excess contributions help to bring down the cost of getting car insurance.
The Benefits of Insurance
Insurance companies offer a wide range of benefits apart from the essentials of covering the basic costs of loss and repairs. These benefits include medical payments; covering other drivers of your car; twenty four hour emergency roadside assistance and things as broken windows or theft of objects from your car .
Having short-term car insurance provides peace of mind in case of misfortunes that can happen when either owning or driving a car on South African roads. It is also important to have peace of mind in knowing that your policy is valid and that you have protection when it is needed. The insurance companies mentioned (AA Insurance, AIG, Alexander Forbes, Dial Direct, Hippo, Hollard, Miway, Momentum, Old Mutual, Outsurance, PPS, Regent, Sanlam and others) are all regulated by the current legislation, as well as being compatible with SAM, and can provide comprehensive cover and hopefully peace of mind. As for each companies level of service, we suggest that you ask your friends and read our online reviews of each insurance company which can be found on our main menu tab, under Insurance Companies.
