What Kind of Car Insurance is Right for You?
Yes, you need car insurance! As a driver in South Africa it is important to know that most cars you will see on the road are not insured, in fact around 2/3 of cars aren't. Drivers are relying on the state-run Road Accident Fund (RAF) in the event of an accident, but may be unaware of the limitations of the fund. The most important of these limitations is that it only provides payment for injuries and death, not for damage to property. If you trash someone’s Mercedes by careless driving you can be sued for the cost of repair or replacement! And if you destroy your own car, you'll need to pay for a replacement yourself!
Car insurance provides extra cover, over and above that offered by the RAF. You never know what or who is around the next bend and how it will affect your wallet. Car insurance reduces your risk of financial ruin if you run into someone or if someone hijacks your car. Some people might see it as a waste of money, but if you are involved in a road traffic accident, the point becomes obvious and you will be glad you are up to date with your car insurance premiums!
But What Kind of Car Insurance?!
If you shop around you will find a wide range of car insurance quotes, though younger and less experienced drivers will always pay more, since car insurance companies consider them more of a risk and more likely to have an accident. Cheap car insurance may be cheap because of restrictive conditions regarding times you can use the vehicle or may include a compulsory high car insurance excess that you would have to pay before the insurer dips into their own pocket to pay the rest of the costs.
You can always use a car insurance calculator to get an idea of the kind of figure you can expect to pay, though quotes are based on the kind of car insurance you're looking for. So what are these different types of insurance?
Different Types of Car Insurance 
Insurance companies offer three types of policy that provide you with cover for different risks:
- Third Party Insurance: This covers any damage to any other vehicle you collide with and personal injury benefits that exceed the low limits that the RAF pays out for. It does not cover any damage to your own vehicle or any of your own medical costs, though some of your medical costs can be claimed from the RAF;
- Third Party, Fire & Theft Insurance: This adds cover for fire and theft to the third party coverage. Given the common nature of car hijacking in some of our cities it is definitely a better idea than just a plain third party policy!;
- Comprehensive Insurance: This includes all the benefits of the third party, fire and theft policy as well as paying you for damage to your own vehicle. If someone rear-ends your shiny new motor with their uninsured 30 year old bakkie, then having comprehensive insurance means your repairs will be paid by your car insurance company. The company then sues the uninsured driver to recoup their costs which is how you would pay for any damage if you did not have comprehensive insurance.
But Which One is for Me?!
Which of these types of car insurance you need basically comes down to three simple questions:
1. Can you afford to pay for repairs of any other vehicle you collide with?
If a road traffic accident is your fault then you will have to find the money to repair or replace any vehicles you hit. This could come to over one million rand! It’s one thing to say “Let them sue me, I don’t have that kind of money,” but the courts can take whatever money and possessions you do have to compensate the motorists whose cars you damaged. You need at least a Third Party policy to protect your future income and home from seizure by the courts if you are successfully sued.
2. Can you afford to replace your vehicle if it is stolen?
If you are running an old car or bakkie that is only worth a few thousand rand then you might be able to replace it with something similar if it is stolen. Otherwise you need at least a Third Party Fire and Theft car insurance policy, or risk paying thousands of Rands to buy a new car.
3. Can you afford to replace your vehicle if it is written off in an accident?
Most of us can’t afford to replace our vehicles if they are destroyed by an uninsured driver, in fact we probably still owe the money that we borrowed to buy our car! Remember the RAF only pays for personal injuries, so if you are in an accident with an uninsured driver you will get nothing towards the cost of replacing your car. The only way you will get any money in this situation is if you have a comprehensive car insurance policy.
The table below sums up the kind of car insurance policy you need based on these three questions:
What Kind of Car Insurance in More Detail
Of course, those three questions are only the basics. There's a lot that goes into determining what kind of car insurance you need, including things like your age and the value of your car. That's why we've put together this test so that you can determine what kind of car insurance you need in more detail. Ready? Then let's get started!
Okay, so the question is at the top, then a list of answers. Next to each answer is the number of points that answer is worth (so for the first question if you answer 18-21 you get 2 points, if you answer 21-25 you get 5 points etc.). This is the test itself (just 6 questions):
| 18-21 | 2 |
| 21-25 | 5 |
| 25-30 | 10 |
| 30-40 | 15 |
| 40-60 | 20 |
| 60+ | 25 |
| 0-1 year | 20 |
| 1-3 years | 18 |
| 3-6 years | 10 |
| 6-10 years | 7 |
| 10+ years | 2 |
| R0 – R6000 | 0 |
| R6,001 – R50,000 | 15 |
| R50,001 – R200,000 | 30 |
| R200,000+ | 40 |
| R0 – R10,000 | 50 |
| R10,001 – R100,000 | 40 |
| R100,001 – R300,000 | 30 |
| R300,001 – R1,000,000 | 20 |
| R1,000,000 | 10 |
| R0 – R160,000 | 0 |
| R160,000 – R200,000 | 4 |
| R200,001 – R400,000 | 6 |
| R400,000+ | 10 |
| 0 years | 0 |
| 1 year | 4 |
| 2 years | 6 |
| 3 years | 8 |
| 4 years | 10 |
And these are the results of the test. I think it would be best if the reader can answer questions then get a total number, then read the last two paragraphs???
What Your Results Mean
If you scored 80 or more points, then Comprehensive car insurance is really going to be the best choice for you. Sure, you'll pay a little more each month, but you can be assured that should anything happen, you'll have the complete coverage that you need to pay for damage to vehicles, property and people.
If you scored 79 or fewer points then either Third Party or Third Party, Fire and Theft will be the best choice for you. How to decide which is right? Well, basically you need to decide what the risk is of your car being stolen. Do you have one of the most stolen cars in South Africa, or do you live in a particularly dangerous area? Then third party fire and theft might be the way to go. On the other hand, if you live in a more rural area, you might be fine with just third party insurance.
What Kind of Car Insurance You Need in Conclusion
Getting Comprehensive car insurance is a sensible precaution in South Africa today if you are driving any car less than ten years old. A Comprehensive vehicle insurance policy is the only way you will be fully protected against everything from hail to a tree falling on you, from a horse running into your car to drunken fools with no insurance hitting you. It means you have regular payments that you have to make, but it gets your car fixed or replaced in a few weeks at little personal cost, so it is worthwhile for most of us.
But if you really can't afford those extra premiums, or feel pretty confident that you can replace your vehicle yourself if necessary, then Third Party or Third Party, Fire and Theft insurance are also both options. Drive safely out there!
Main Subject: car insurance
