Car insurance in South Africa

If you are driving in South Africa, you’ll need to consider about taking out a car insurance policy. This guide explains what you need to know:

Car insurance in South Africa

Unlike in many countries, car insurance in South Africa is not compulsory. However, there are a high number of road accidents and vehicle thefts in South Africa each year. Thus, it makes sense to take out a good car insurance policy to protect yourself against unnecessary expenses.

There are many South African insurance companies that provide car insurance coverage. Policies insure the vehicle rather than the driver. However, you will need to name the listed or designated driver of the car. You can add other drivers on but this may affect premium costs. Although it is the car that is insured, you can get extended coverage that allows you to drive other people’s cars.

Because car insurance in South Africa isn’t mandatory, many drivers don’t have it. In fact, around 70% of cars in South Africa are not insured according to research.

The Prudential Authority, which is an arm of the South African Reserve Bank, regulates the car insurance sector in South Africa. Many companies belong to the South African Insurance Association (SAIA).

Can you use car insurance from another country in South Africa?

If you have a basic car insurance policy in another country, you won’t be able to use this in South Africa. However, if you have taken out an international policy or a full comprehensive policy that includes coverage abroad, you can transfer the policy. Check with your insurer whether you are covered ahead of moving.

Regardless of whether or not you can use your overseas car insurance policy, you will need to register your vehicle with the South African authorities when you import it.

Types of car insurance in South Africa

If you plan on driving in South Africa, there are three different main kinds of car insurance that drivers can choose from.

Comprehensive car insurance

This is the most extensive – and the most expensive – coverage. If you have financing for your car, the bank will insist on comprehensive coverage.

As the name implies, this insurance covers pretty much everything including damage, theft, and costs to your own car and third parties in the event of an accident where you are at fault. Policies vary between different insurers, so you’ll need to check whether things such as breakdown assistance or coverage abroad are included or not.

Limited car insurance

Limited coverage is somewhat cheaper than comprehensive coverage and covers you for theft, fire, and hijacking. It also covers you against third-party claims. However, you don’t have coverage for your own vehicle’s damage in the event of a collision.

Third-party car insurance

The cheapest of the lot, third-party insurance will only cover damage done to other people’s property. This is often not a very wise choice unless you own a very old vehicle. Third-party insurance won’t cover you if you drive your car outside of South Africa.

If you want additional coverage but don’t want to take out a full comprehensive policy, some companies offer the option of taking out extra insurance for specific things such as roadside assistance.

Costs and excess

Besides the type of car insurance you take out in South Africa, your premium costs will be based on a number of different factors. These include:

• current value of your vehicle – you can choose from four different value options in South Africa;
• your driver profile – age, health, and driving history;
• where you live;
• how much you drive, with some insurers offering discounts or pay-as-you-go options for drivers who do not travel much;
• what you use your car for;
• how many drivers are listed on the policy.

In addition to this, your excess or deductible will affect the cost. This is the amount that you have to pay towards any claim you make. All insurers have a compulsory excess, but you can increase this in order to make your monthly premiums lower.

Some insurers also offer a discount if you agree to install a tracking system on your vehicle.

Additional forms of car insurance in South Africa

Most South African companies offer the three forms of car insurance listed in the above section as the standard types. However, some have additional standalone policies that you can purchase for extra coverage. This can be useful if you buy third-party insurance and want limited extra coverage.

Examples of additional insurance you may find include the following:

• Legal insurance – covers any legal expenses should a claim against you end up going through the courts.
• Breakdown assistance – covers costs such as towing and replacement transport if you suffer a vehicle breakdown in South Africa.
• Medical insurance – covers medical costs should you suffer an injury and need medical treatment following a car accident.

Car insurance bonuses and penalties in South Africa

South African car insurance usually comes with a discount option for long-term customers known as the no-claims bonus. This is where you are entitled to a percentage discount on your annual premium if you go a certain period without making any insurance claims.

Insurers in South Africa tend to have their own individual schemes and incentives. Generally, no-claims bonuses are offered after a three-year period, with discounts increasing incrementally with each passing year without a claim.

You should check the no-claims offer before signing up for a policy. Not all companies offer it as part of the standard package. Some charge an additional premium fee which you can choose to opt into.

You should also check whether no-claims periods can be carried over between insurance companies or from other countries. Again, the situation varies from company to company.

While insurers may reward good drivers who haven’t made any claims, they are also likely to punish those with a bad driving record or who are considered high risk. Your premiums are likely to increase if you:

• have incidences such as speeding or drink driving on your record
• have caused any accidents through careless driving
• are a young or inexperienced driver

Car insurance companies in South Africa

You can choose between a range of different South African companies that offer car insurance. According to Compare ‘n Review, top car insurance companies in South Africa include:

• 1st For Women
• AA
• Discovery
• King Price
• MiWay
• Momentum
• OUTsurance
• Santam

Another option is to purchase coverage with an international car insurance provider that covers you for driving outside South Africa. Premiums will generally be more expensive but this is a good option if you travel frequently and need to drive abroad.

You can compare South African car insurance policies and premiums using a comparison website such as Compare Guru.

How to choose car insurance in South Africa

Be sure to shop around when looking for an insurer. Consider factors beyond what the monthly premium fee is and make sure you choose a company licensed by the Financial Service Conduct Authority (FCSA). Things you might want to consider are:

• Company reputation – how does it fare in consumer website ratings and what is the customer feedback like on review sites?
• Claims process – how easy is it to make a claim and how long are you likely to have to wait for compensation? Check the small print and, again, look at reviews.
• Policy coverage – what is included and what is not covered? Do you get coverage abroad? If you opt for fully comprehensive, check for any exclusions.
• Excess/deductible options – what is the compulsory excess you will have to pay when making a claim and what options are there for increasing it?
• No-claims bonus – what bonuses are offered and can you transfer them between insurers? Are any other discounts offered?
• Ethical performance – how green is the company? How does it score in terms of Corporate Social Responsibility (CSR)? Does it pay fair wages? You can check company ratings on websites such as CSR Hub.

Applying for South African car insurance

Each insurance company in South Africa has its own application procedures. Some companies ask you to complete your application over the phone and send off copies of any supporting documents. In-person and online applications are available with many providers.

You will typically need to provide:

• valid ID such as a passport
• contact details including proof of South African address
• proof of the car’s existence (e.g., registration number)
• South African ID number
• customs papers if you imported the car to South Africa

You will usually be asked to fill in an application form where you answer questions about your car (e.g., value) and yourself (e.g., driving history). Sometimes the insurer will request a home visit or ask you to bring the car in for inspection. This is to check the car’s condition.

Policies are usually sorted within a few days. You should receive your insurance certificate along with an information pack with details on what to do if you need to make an insurance claim. You may also receive a claim form.

How to make a car insurance claim in South Africa

If you need to submit a claim, do it as soon as possible. Some insurers have a claims window that you must file your claim within. Make sure you have your policy number and driving license details to hand.

The claims process depends on your insurer. Some ask you to file the claim over the phone. They will then send you a claim form for you to complete and send back along with supporting documents. Others may ask you to submit your claim online.

The process also depends on what type of claim you are making. If you’ve had an accident, you’ll need to provide full details of the accident along with details of other parties involved. Depending on the seriousness of the accident, you may also need to contact the police and send the police report to the insurer. It’s also a good idea to take pictures and any witness statements to support your claim.

If you’re making a claim because your car has been stolen, you’ll need to provide details of where the car was located along with information on any security systems in place to protect the car.

In general, your insurer deals directly with the dealership. The excess must be settled by you in order for the new or repaired vehicle to be released. If you want to get your car repaired at a particular garage, send the garage details and repair quotes to your insurer.

Canceling a contract or changing provider

You may want to cancel a car insurance contract for a number of reasons. For instance, you’ve found a better deal elsewhere, you’re leaving South Africa or you’re simply not happy with the service you’ve received.

In general, it’s quite easy to cancel a South African car insurance contract. Many allow you to cancel without giving a notice period. However, this can look bad to other insurers so it’s best to be courteous and give at least a month’s notice.

Also bear in mind that some companies won’t reimburse you for fees you’ve paid upfront, which could sting if you’ve paid annually and have a few months left. Some companies may opt to charge a cancelation fee. You should be informed of this when you take out a policy.

Each company will have its own cancelation procedure. You will likely be asked to give a reason. Your insurer may try to persuade you out of canceling, especially if you have no plans to take out car insurance elsewhere.

If you are changing to another insurance provider, check with your new insurer to see if they offer any assistance with the transfer. Some companies are happy to deal with all of the paperwork and offer this as an incentive to attract new customers.

Making a complaint about a car insurance company in South Africa

If you wish to complain about a car insurance company in South Africa, you should first try to resolve the issue with the company itself. All insurance companies should have a complaints department and a procedure to follow, which is typically submitting a complaint in writing.

If you are not happy with the outcome of the complaint, you can take it to the South African Insurance Ombudsman.

Roadside assistance in South Africa

Car insurance companies in South Africa typically offer roadside assistance coverage as part of their fully comprehensive package. Some also sell breakdown coverage as a standalone policy or as an add-on to third-party insurance.

Drivers in South Africa can also join a membership club. The most well-known one is the Automobile Association of South Africa (AA), which provides breakdown services as well as other products.

Dealerships also often provide roadside assistance for an annual fee. If you buy a new car in South Africa, it might be worth enquiring about what is on offer.

The AA offers a range of different plans to suit different needs. Prices are based on your vehicle’s make, age, condition, and mileage.

Useful resources

• South African Government website – information about registering a car in South Africa
• Prudential Authority – regulates insurance companies in South Africa
• Financial Services Conduct Authority (FCSA) – list of regulated insurance providers in South Africa
• Insurance Ombudsman – deals with insurance complaints
• Automobile Association of South Africa (AA) – car membership organization providing services such as roadside assistance
• Compare Guru – comparison tool for South African car insurance providers