A Comprehensive Look at Car Insurance in South Africa

We wanted to take a look at car insurance, the car insurance companies in South Africa and what it takes to find affordable car insurance. From taking a look at the different types of car insurance South Africa has to offer, to a quick peek at car insurance quotes online, we tackle everything from how your vehicle should be insured, to how your premium is calculated.


The Different Ways in Which Your Car can Be Insured

When it comes to car insurance, there are three different ‘types’ of insurance. The first is known as Comprehensive cover. This means that the damage to your vehicle (be it an accident, damage that was malicious in nature, motor glass damage, fire and theft) is covered as well as damages made to a third party vehicle.

Limited Cover entails that your vehicle is covered in terms of fire and theft. This type of insurance will also cover a third party’s damages.

Third Part Damage only entails insurance that do not cover the damages to your vehicle, but it does cover the damages to a third party vehicle.

Now, for the difference between Trade, Retail and the Market Value of your vehicle.


Making use of an industry accepted auto dealer guide (used by all car insurance companies in South Africa), the Retail Value of your vehicle is simply the retail value of your vehicle according to the make and model of the vehicle, the model year, the condition it is in as well as the mileage. This Retail Value is an estimate of the price car dealers will sell your vehicle to a buyer for.

Covering your car for its retail value means that, should your car be stolen (and not recovered) or damaged beyond the point of repair, the settlement amount you will receive is the Retail Value minus the excess you agreed upon on your car insurance. This will likely allow you to replace your vehicle with a similar model.

The Trade Value of your vehicle is the estimate (according to industry standards) a dealer will likely give you when purchasing your vehicle.

In turn, the Market Value of your vehicle is the average between the Trade Value of your vehicle and the Retail Value of your vehicle (determined by industry standards). Covering your vehicle for your Market Value might not fully enable you to replace your car with a similar model.

Business vs Private Use

Another very important aspect of insuring your vehicle is how you use your vehicle. Private use is very simple – you use your car to drive to work and back home again. Other than that, your car is used to go away on weekends, to go shopping and pick up the kids from school. Everything that can be described as ‘private’.


Business use entails you using your car to visit clients or even take orders. If you are a Rep or even an Estate Agent travelling from location to location using your own vehicle, you will have to insure your vehicle for business use.

Professional use is something that some insurance companies may make provisions for. This type of insurance applies to professionals like engineers who may travel from their office to a work site.

Remember that it is vital to disclose how you use your vehicle to ensure that it is insured correctly.

Younger Drivers

It is no secret that younger drivers pay more for car insurance, but why?

Well, insurance companies see younger drivers as a higher risk to take on. Though you might argue that you are not like other young drivers, the risk of younger drivers are seen as a ‘general’ and the experiences of insurance companies do support this.


Though not fair to all young drivers, younger drivers are seen as a higher risk simply because, among many other reasons, their driving experience, their lifestyles (late nights and partying) and the higher driving speeds of the younger driver.

Is it fair to everyone? No. But unfortunately it is something that cannot be avoided.

How your Car Premium is Calculated

When your premium is calculated, it is calculated as a percentage of the sum insured. The calculation done in order to determine your premium involves two different aspects – your Discounts and your Loadings (what might cause your premium to rise).


The Discounts that might be awarded to your premium include:

  • A Lower Risk Area: The lower a risk in an area, the higher the discount that might be awarded.
  • Security: This entails the additional security measures taken in regard to your vehicle.
  • Claims: If you have a low or a ‘no-claim’ history, it can add positively to the discounts that may be awarded to you.
  • Your Excess: Mentioned in the ‘Ways to Reduce your Premium’ section of this blog post, the higher excess you are willing to add to your premium will bring down your monthly premium.

The Loadings that might be awarded to a premium can range to include:

  • The Use of your Vehicle: The use of your vehicle will have an influence on your car insurance premium. Vehicles used for Business purposes usually attracts a higher rate.
  • Age: The age of the driver of the vehicle. As mentioned previously, younger drivers are seen as a higher risk.
  • License Period: How long you have had your license also influences your insurance premium.
Affordable Car Insurance – Ways to Reduce your Premium

There are a couple of ways you can reduce your monthly car insurance premium apart from actually acting responsibly and keeping your claims to a minimum.

First, you can offer to pay a higher excess. This means that you will be your ‘own insurer’ for a portion of the damage that might occur. Do note that, should a high damage occur, you will be responsible for covering a portion of the costs, so make sure that you can afford the excess should the worst happen to your vehicle.


Another way you can reduce your premium is by taking security measures above what is required by your insurer. A simple example of this might be the installation of car tracking system that might not be required by your insurer. Once you have taken these extra measures, notify your insurance company. This might result in the insurer considering a discount on your premium.

Important Things to Check with your Car Insurance

When it comes it car insurance in South Africa, there are a number of important aspects you should consider and questions you should most definitely ask.


  1. Is my vehicle correctly insured? – It is extremely important to check how your car is insured. Remember, your options here include Comprehensive, Limited Cover and Third Party Cover only.
  2. How do I use my vehicle? – Another important question that will determine whether your car is correctly insured or not. Do you use your car for Business, Professional or Private?
  3. For how much is it insured? – It is very important to ensure that your vehicle is insured for the correct amount.
  4. Am I, the insured, compliant? – You have to make sure that you adhere to the agreements set out by the Insurer. A great example of this would be the installation of security measures in your vehicle (like a Tracker for example) if it is a requirement of your policy.
  5. The Risk Address – Your Risk Address is your home address and it is very important that it is correctly noted with your insurance company.

Other important aspects to pay attention to include the descriptions of the items on your insurance policy, the excess structure (which will help you understand what your excesses – or amounts – are in the event of a claim) and the endorsements.

Also make 100% sure that you have read through the policy’s wording, understand the Terms and Conditions, and that all of the information required by the insurer has been submitted.

Beneficial ‘Value Added’ Products for your Car Insurance

The great thing about Car Insurance Companies in South Africa is the Value Added products you can add to your insurance. There are quite a few of these products that are (very) cool, but some of the ‘good to haves’ include Vehicle Hire (entailing that while your car is in the shop for example, you will have a car) and Road Side Assistance.


Do note that the costs of these Value Added products will differ from company to company.

Car Insurance Companies in South Africa

There are a large number of insurance companies in South Africa to choose from. Some of these insurance brands include, but are not limited to:

SantamMutual & FederalAuto & General
DotSureFirst For WomenDiscovery
RegentDial DirectHollard
King PriceOutSuranceMiWay
Budget InsuranceUnity

Please note that there are also other companies that do car insurance and this list is in no way meant to point out the best car insurance in South Africa. It is important to shop around and do a thorough car insurance comparison.

Be careful not to take the lowest insurance quote as it might not necessarily be the best. When researching and doing a car insurance comparison, remember to make 100% sure that you are insured for exactly the same things/items.

For example, a premium might be lower with one insurer than another, but taking a closer look you might find that the lower premium involves a higher excess, or the policy might not include the Value Added products the other does.


Affordable car insurance might not always mean the lowest monthly premium. Remember to keep your excess, value added products and the type of insurance (Comprehensive, Limited or Third Party Cover) in mind when choosing the best insurance for your lifestyle and financial needs.

It might also be a good idea to consult a short-term insurance broker to help you understand and navigate your way to finding the most affordable car insurance.

Also keep in mind that car insurance companies in South Africa might underwrite certain products or be a product of another company. For example, VirSeker is a product of Auto and General, while the products from Unity Financial Services is underwritten by Auto and General.

TwentySure and DotSure.co.za are products of Oakhurst Insurance, while ibuyeco is a product of Dial Direct.

Car Insurance Quotes Online

The great thing about access to the internet and all the technologies that go along with it, is access to car insurance quotes online. There are a couple of sites that can help you get a quote from different car insurance companies in South Africa, one of the best known sites being www.hippo.co.za.


This online platform allows you to get a quote from a number of different insurance companies including Auto & General, Dial Direct, VirSeker, Hollard, Standard Bank and First for Women.

Most insurance companies also offers you the opportunity to get your car insurance quotes online. Some of these companies include OutSurance, Hollard, Santam and First for Women, to name but a few examples.

Do however keep in mind that these online quote platforms should never take the place of the expertise and knowledge of a Broker or Representative. There are so many factors that influence your premiums that, not taking the opportunity to talk to a knowledgeable professional in the industry, is not the wisest of choices.

Always remember that finding the best car insurance in South Africa does not necessarily mean taking the cheapest quote. Affordable car insurance also doesn’t mean opting for the cheapest quote, but rather the insurance that offers you the most for the lowest cost (be it on a monthly basis or in terms of your excess structure).


When choosing to purchase a vehicle, remember to keep your vehicle finance as well as the costs of your insurance in mind. Already know what your monthly budget is and made provisions for your car insurance costs? Why not browse www.AutoMart.co.za for great deals on a new or used car for sale.

*A very special thanks to Tobie Hanekom from Anchor Risk Management (Pty) Limited for taking the time to explain some of the terminology to us and giving this writer some awesome tips to share with our readers.

Annabel Schoeman

SEO'er, blogger and lover all things weird, wacky and interesting.

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1 Response

  1. Tony Roger says:

    If you own a car, the most important thing you must do is to have car insurance. The policy coverage not only protects your car but your family members too. In this context, you have nicely explained the benefits of having the car insurance.

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