Welcome to Car Insurance South Africa
Paradox, a word that best describes Car Insurance in South Africa. But clearly protecting your valuable car from everyday risks should not be a complicated thing. That is why carinsuranceza.co.za is dedicated to giving you everything you need to know on insuring your car in SA.
“Paradox: A paradox is a statement that contradicts itself and still seems true somehow. Fancy that. Everyday examples include, “Nobody goes to the restaurant because it’s too crowded” shmoop.com.
By simplifying everything for you we allow you to be in a better place to choose the best insurer for you. There are a lot of things about getting car cover that may seem complex but in reality, they are not. The sad truth is that insurance professionals have taken using industry jargon for guaranteed.
Purchasing Car Insurance in SA 101
We shall not dwell too much on why you need to get insurance for your car. Statistics available on road accidents and causalities are reason enough to get cover. According to the AA, more than 10,000 people die annually due to road accidents. But the real reason to get insurance is to protect your ride, your baby.
While getting instant quotes from a variety of companies is the fastest way to buy cover for your vehicle, it is also a good way of getting a raw deal. Don’t believe us? Read On and we will explain.
Another Car Insurance Myth
There is no doubt that insurance, whether for cars, life or anything else is based on pooling similar “exposure” units together. (In the case of motor vehicle insurance the car is the exposure unit). But insurers have found that individuals are unique.
So while many people would have you believe that one insurer is the same as the other that is completely false. As they (underwriters) realized that people’s insurance needs are different, they saw it necessary to curve themselves special portions of the market. Each insurer evaluates the potential risk of a set of exposure units. When the insurer is confident that they can manage to cover a group profitably they operate targeting that specific group. The result has been specialized car insurance policies.
Cheap Car Insurance Quote Vs The Best Car Insurance Quote
There are over 40 car insurance companies in South Africa. From AA Car Insurance through to Hippo Car insurance everyone is offering budget car insurance. One thing is clear from all their messages are savings to be made in motor insurance.
Budget Car Insurance the Winner
The word budget is usually taken to mean of low value, again this is another misconception. Synonyms of the word include inexpensive, economic and reasonable. We do not know about you but these are the words we like to associate with our car insurance premiums. Already insurance is one of the biggest costs of owning a vehicle. No one should have to add to that bill unnecessarily.
This discussion is best started with a bit of detail on what is on offer in the market at the moment. There are basically three types of insurance you can get to cover using a motor vehicle. Namely, these are Comprehensive Insurance, Third Party Insurance and Third Party, Theft and Fire Insurance. If you are already well versed with all this then jump to the next section. Otherwise, read on.
Break down of the Types of Car Insurance
- Third Party Car Insurance – This is the most preferred form of vehicle cover by South African motorists. This is according to statistics from the AA. The reason so many people buy only third-party insurance is that it is the cheapest. Third party car insurance will cover the cost of repairing people’s property you damage with your car.
- Third Party, Fire and Theft Insurance – The policy is an upgrade from third party cover. In addition, policyholders are also protected from losses to their car caused by fire, hijacking or any other form of theft. But Third Party, Fire and Theft cover will not reimburse car owners for any cost arising from damage to their own car as a result of an accident.
- Comprehensive Car Insurance – Assuming the full risks associated with owning a motor vehicle cannot come cheaply. That is why comprehensive car insurance costs more than all the other types of insurance. With this policy, the car owner will get compensated for damages to their car, damages to third parties and loss due to fire and theft. This policy provides complete peace of mind which is why financed cars are supposed to have it. But as mentioned before if you get it right, you can get cheap comprehensive car insurance.
Now that you know what is available in the car insurance market lets us discuss tips that will help you get the best cover for your car. Everyone has different insurance needs which makes finding the perfect car insurer a real money saving move. The good thing is that the skills that are required to be Car-Insurance Savvy are universal and we have listed them below.
- The most important thing when trying to save money on car insurance premiums is to get the right car. Naturally, there are cars that cost more to insure than others. The reasons for the dissimilarity in prices are vast including the cost of the vehicle and the likelihood of the car being stolen.
- Voluntary Excess is a way to pay less on your car insurance premiums. Top car insurers in SA allow policyholders to negotiate the eventual premium they pay. Clearly, the price of the premium is no longer enough to make a decision on who to insure your car with.
- Modifications to your car affect how much you eventually have to pay for insurance. “Pimping” your car makes it more attractive to hijackers thus increasing your premium. On the other hand, upgrading your alarm will reduce the amount you have to pay.
- Travelling less with your car is always a great way to get reduced premiums. Insurers acknowledge that someone who drives less has a reduced chance of having an accident. Thus they modify the car insurance package accordingly.
- Insurance marketers are out to get you to pay for as many extra products as possible. While this is ideal for their bottom-line, it has an opposite effect on your bank account. If you are Mr. or Ms D.I.Y and you do not need breakdown cover there is no need to get it.
- There are bonuses awarded to customers who stay claim-free for a set period of time. Members of the South African Insurance Association reward careful drivers with cashback bonuses and massive discounts on premiums.
- Taking an advanced driving course will definitely result in big savings on the money you pay monthly or annually for motor insurance. Remember paying annually is cheaper than paying monthly.
- Telematics, the best for last. Also called Blackbox Insurance, this is a new feature in the South African insurance industry. The technology is trending world over because of its ability to reduce automobile insurance costs. Telematics will report back to the insurer with data on your driving. If you are a good and cautious driver your car insurance premiums should drop, if they do not consider moving to another insurer.
There are many reasons why insurers offer different people different premiums. This is because they group customers into similar risk exposure units. Insurers have managed to come up with behaviour prediction models which help them determine how much cover each individual has to pay. That is why younger drivers, less experienced drivers and regular claimers pay more.
However, competition and advances in technology are changing how car insurance is offered. There are now many insurance companies that provide specific cover to certain groups in society including students and women drivers. Because these car underwriters are dealing with very specific exposure units they can offer more competitive packages. This makes it quintessential for you to be diligent in making your choice on who insures your vehicle.
Car Insurance Calculator Skills
There are many online insurance calculators, some you can trust and others are designed to look good but will leave you when you need them the most. That is not our style here CarInsuranceZA. Instead, we give you the necessary skills to be a human car insurance calculator. This is because the process is regulated by the Law.
The actual mathematics is the staff of actuaries (really smart people). But basically, an insurance premium is a percentage of the value of your car. Calculating the value of your vehicle is simple.
There are two values that you need. These are the Retail Price and the Trade Price. The Trade Price is the amount that a second-hand car dealer will pay for your car. This is the lowest value that your car can be insured for. The Retail Price is the amount of money that a used auto trader will sell your car. Insurers take this as the highest value they will insure your motor vehicle for.
Insured Value = (Retail Price + Trading Price) ÷ 2
Factors considered when deciding the percentage of the insured amount you pay as a premium are categorized into Discounts and Loads.
Loads are defined as things that will cause your premium to rise. These include the use of your vehicle (Professional Use vs Personal Use), age, driving history and gender.
As the name indicates these are factors that will force the insurer to review your premiums down. The list includes moving away from a high crime area to a safer area and extras like the Excess you are willing to pay.
Trust should not just be given but earned. This is not something that anyone should take for guaranteed when looking for car insurance South Africa. The need to be sure increases when dealing with matters of money and protecting yourself or your property. While it is essential to be adequately covered, it is also important to get the best car insurance deal in South Africa. Car Insurance South Africa makes sure you get enough coverage at budget car insurance prices.
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