When you take out a car insurance policy you are entering into a legal contract with the insurance company of your choice. To be able to enter into any legal contract you need to have contractual capacity. This capacity can refer to age and mental state.

In terms of common law, which is accepted and used in South Africa, you need to be 21 years old to enter into a legal contract. People under the age of 21 are referred to as minors and they have a limited contractual capacity. However, even if you have full contractual capacity entering into any contract requires a willingness and acceptance from both parties. It is well-known that insurance companies in South Africa do not like to insure people under the age of twenty-five; if they do accept to provide insurance cover an additional excess is usually payable as well as a higher monthly premium.

Mental capacity refers to the mental state of a person. Someone who is declared as mentally unfit cannot enter into any insurance contract. Drunkenness can invalidate a contract if it can be proven that the person could not understand the provisions of the contract because of the state of inebriation. Looking at it from the other side, if you drove your car under the influence of alcohol or drugs and are involved in an accident your claim will be null and void.