You shouldn’t consider it cheap car insurance unless you’ve made comparisons with other insurance companies. That being said, you may not know where to begin comparing car insurance quotes, but the fact that you are on this website is a path in the right direction. This simple guide will help you along the way to buying both comprehensive and third party insurance.
What is third party insurance cover?
Third party insurance cover is a limited car insurance type, but it would suffice in a case where there is a need to cover the aggrieved party who was a victim of an accident. The insurance would cover the victim’s loses, depending on the extent of the loss, like any other insurance policy. This would also benefit the driver at fault because he would be alleviated of the burden of the bills as a result of the accident.
Another very important aspect of this is the impact it would have on South Africans as a whole. Currently, the Road Accident Fund is a public fund that compensates the victims of road accidents when the person who caused the accident is uninsured. It’s basically a subsidy for those who do not want to pay for insurance! This doesn’t seem right, thus, the SAIA’s efforts to get government to enforce third party insurance cover to every car owner.
A major problem with enforcing mandatory 3rd party insurance would be for new car owners who finance their cars through banks. They are usually required to take up comprehensive cover, ie. full insurance coverage. Would they need to take up additional third part only insurance even though they already have comprehensive insurance? This could easily leave owners over-insured, which is a major problem for the policy holder.
You can go on with life pretty okay without insuring your car, but the benefits of having it insured are way higher than the costs of not getting cover. South Africa’s top car insurance companies offer substantially low premiums for third party only insurance than they do for comprehensive cover. For a fraction of the monthly premiums on comprehensive insurance, you can buy third party insurance.
Third party insurance does not cover you!
Third party insurance will not cover your own car, hence it’s often called liability insurance. It covers your liabilities to the damage you cause to other cars and property. Nevertheless, the following are worth noting about this and any type of insurance.
When comparing cover, look out for car insurance companies that offer you a pay as you drive option. This is usually a very affordable and very equitable way to insure your car. You only pay insurance for the distance traveled and nothing more. However, don’t just jump into this option. The reason for the latter is that you may drive more than expected and as such have a higher premium that month than previous months. Your budget may take a hit. Whenever you consider any 3rd party pay as you drive insurance, make sure there are alternative transports around so that if you do use up all your “distance allowance”, you can just take an easy bus or train without increasing your premiums. Hollard Car Insurance and Discovery Car Insurance are possibly the best known providers of this type of insurance in South Africa.
Another important thing to look out for is the excess or deductible. This is the amount of money that you must have in hand when you make a successful and significant claim. Some insurers have a zero excess policy, where instead you would have to pay higher premiums. Other insurers have a high excess policy, whereby you’d have to pay low premiums for your car insurance. With regard to excess, Outsurance is the most popular insurer with zero excess, while the insurers in the Telesure Group, like Dial Direct Insurance, are commonly associated with excess fees.
Besides pay as you drive third party insurance, many of the insurance companies offer cash back bonuses or some other rewards for not claiming. Outsurance has the OutBonus, while Dial Direct has the Simple Smart Bonus – that’s just two of the most popular rewards programmes. When comparing insurers, look out for the terms of the reward. The simple idea behind this is that the insurer pays you back a % of your insurance premiums but only if you haven’t missed payments, and have not made any claims during that period. But these rules are not cast in stone and they vary greatly with each car insurance company.
- South Africa’s Petrol Price Structure
- The Road Accident Fund Compensates the Uninsured
- Can You Afford To Not Have Third Party Insurance?