HOW DOES CAR INSURANCE WORK?
Car insurance covers your vehicle for any damage or loss. The insurer pays out for repairing your car in the event of an accident if you have comprehensive car insurance. It also pays out for vehicle loss as a result of theft, hijacking or other circumstances like a fire. Car insurance will also cover the damage to other vehicles as part of the third party cover.
IS CAR INSURANCE MANDATORY?
Car insurance is not mandatory for drivers according to South African law. Vehicle owners do not have to insure their vehicle in order to drive it on South Africa roads. In fact 7 in 10 cars on South African roads are uninsured. However, cars that are still under finance need to be insured and have comprehensive car insurance according to the terms of the vehicle loan agreement.
HOW MUCH DOES CAR INSURANCE COST?
The cost of car insurance varies greatly depending on a number of risk factors, including the make and model of the vehicle, value of the vehicle and your history as a driver. It also varies according to different insurers. Parking your car in a safe place at night, installing a satellite tracking device and even driving safely are some measures that can help you with cheaper car insurance.
WHO IS RESPONSIBLE FOR PAYING FOR ACCIDENT DAMAGE?
The person who is at fault is responsible for paying for the accident damage. However, this does not always occur. Most vehicles on South African roads are uninsured. Attempting to recover the cost from an uninsured party can be difficult and at times even impossible. This can leave you out of pocket even when the accident was not your fault. Car insurance pays out whether it was your fault or not.
WILL CAR INSURANCE PAY FOR A NEW CAR?
In the event of vehicle loss, the insurer will pay a lump sum which you can use to purchase a new car. This payout is based on the book value or replacement value of the vehicle, depending on your cover. It is important to understand the difference. The payout amount will not be the same as what you paid for purchasing the vehicle.
WILL CAR INSURANCE PAY FOR AN OLD CAR?
Yes. Provided that the vehicle is mechanically sounds and in roadworthy condition, you can easily find car insurance for old cars. Even vintage cars may be covered by some insurers. However, it is important that vehicle owners continue to maintain their older cars in peak condition as claims can be rejected if the vehicle is mechanically compromised.
DO PENSIONERS GET A DISCOUNT ON CAR INSURANCE?
Most insurers will provide extra benefits to pensioners and senior drivers. This may in part be due to safer driving habits and shorter distance driving compared to younger drivers. However, car insurance for pensioners is also subject to the same risk profiling as cover for any driver of any age. Similarly, factors such as parking on the street at night and the lack of a satellite tracking device can lead to higher premiums.
Being a vehicle owner in South Africa is fraught with risk. According to a World Health Organisation (WHO) report in 2018, South Africa has one of the world’s poorest road safety records in the world. Car hijacking and theft rates within South Africa is also among the highest globally. You could lose your vehicle within seconds. Consider these facts about South African roads and vehicles.