Types of Car Insurance in South Africa: A Helpful Guide



Blog, Vehicle
A Grey BMW SUV standing on a patch of grass in the early morning mist

South African roads are notoriously high-risk. Whether you’re an existing car owner or a potential buyer, it’s a good idea to consider getting your car insured should anything happen.

Understanding the different options available to you will help you decide which best suits your specific needs and budget. Most insurance companies in South Africa offer three kinds of car insurance:

  1. Third-party cover
  2. Third-party, fire, and theft cover
  3. Comprehensive car insurance

If you already have a good idea of what you need, go ahead and check out our list of car insurance companies. If not, this article will cover what car insurance is, the different types of insurance available, and factors to consider when buying it. 

What Is Insurance For Your Car?

Simply put, it’s a contract between an individual and an insurance company that protects you against financial loss in the event of any damage or theft. The terms of this contract are outlined in your specific policy. 

From physical damage due to natural disasters and even loss in the event of a hijacking, limitations are specified in each contract. 

Close-up of a car with damage to the headlight and front of the vehicle

Different Types Of Insurance For Your Car

As mentioned previously, there are three main kinds of car insurance offered by insurance companies in South Africa. 

1. Third-Party Cover

This type of car insurance only covers the damages and injuries sustained to third parties – i.e. the other person. With third party cover, any loss, injuries or damage to yourself or your car will not be covered. 

Some companies even offer a pay-as-you-drive option. This is when your monthly fee is determined by the average distance you drive each month. 

This is therefore the cheapest of the three options, and a fair option if your car is fully paid off or of low value. That way you are spared from having to cover the costs of a third party’s expensive repairs. 

2. Third-Party Fire And Theft (Also Known As ‘Limited Liability’)

This option will cover the costs of damages to third parties. This includes damage to one’s vehicle and accidental death or injury as a result of an accident. 

It also covers losses in the event of theft or hijacking, or those caused by fire, lightning or an explosion. However, if you cause an accident, your own vehicle’s damages aren’t covered. 

The option for Third Party Fire and Theft cover is suitable for cars that clock an average mileage and are almost fully paid off.

3. Comprehensive Cover

This is the most expensive of the three car insurance plans, but not without reason. It provides cover for most situations, with third parties included. 

Comprehensive cover generally covers:

  • Damages caused in an accident, fire, explosion or natural disaster
  • Losses due to theft or hijacking
  • Damages incurred to third parties as a result of an accident
  • Third-party claims

Generally, this type of insurance is a requirement when financing the payment on your car. It’s also the most suitable option for new and expensive cars that tend to clock up a higher mileage. 

Factors To Consider When Buying Motor Insurance

While it’s good to know what your options are, you also need to bear in mind external factors.

These factors may influence the premium that you will pay for your car insurance. While shopping for car insurance, being mindful of these factors may help you save money.

1. Insurance choice

This one may seem obvious, but the amount that you pay as a premium is determined by the type of cover that you choose. You can expect to pay more for more comprehensive motor vehicle insurance, and less for third party insurance. 

Prices may also vary between different companies, so it’s a good idea to do your homework and get as many quotes for car insurance as you can. 

2. Age

Younger drivers are generally less experienced on the road. They are considered to be high-risk in comparison to older, more mature drivers. As a result, younger persons can expect to pay a higher premium amount compared to their senior counterparts. 

3. Gender And Relationship Status

Men are considered high-risk and can therefore expect to pay a higher premium amount compared to women. Married individuals also tend to pay lower premium amounts compared to single people. 

4. Location

The amount that you pay on your car insurance premium can also be influenced by where you live and where you drive. For example, cities are considered high-risk in comparison to rural areas.

5. Security

You can expect to pay less if your car is parked in a garage with additional anti-theft and security measures in place to ensure your car is safe and secure. This includes (but is not limited to) installing a satellite tracking system, gear lock, and alarm system. 

Man with a screwdriver attempting to break into a car via the driver's door

6. Excess

This is the payment amount that you pay when submitting a claim from your insurance company. The more you are willing to pay, the less you’ll pay on your premium.

7. Car Model

Certain car makes and models are considered either more or less high-risk than others. They may be more prone to theft or hijackings, or be more expensive to maintain and repair. Therefore you can expect your premium amount to be greatly influenced by this factor.

8. Your Driving History

Persons who have no history of accidents or reckless driving can expect to pay less on their premium compared to those who do. 

9. Mileage

If your annual mileage is high, this is seen as high-risk. High mileage increases the likelihood of an accident, and so you can expect to pay more on your premium.

Having The Final Say On Car Insurance

Man inside his car, sitting in traffic with his hand on the steering wheel

Although it may be tempting to opt for the cheapest option, it’s important to carefully weigh your options first. It’s also useful to be aware of the factors that may influence the amount you need to pay. 

You should bear in mind that having any type of car insurance is a safe option. Whether you opt for third party cover or a more comprehensive package, these make a difference. It’s probably better than to unexpectedly have to pay excessive amounts out of your own pocket. 

There are still pros and cons to each. But at the end of the day, knowing the key differences will help you make an informed decision.


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