Does car Insurance work in South Africa?

How does Car Insurance work in South Africa? Vehicle insurance is one of the most significant financial purchases any South African can make.

This means that finding the right insurer who offers the best cover for less, is important.

South African consumers tend to remain with the same firm for a long time, without cross-comparing against competitors. Thus they miss out on savings that are available by shopping around for the best deal.

How does Car Insurance work in South Africa?

Our comparisons of various vehicle insurance policies are essential for consumers shopping for deals from top SA brokers and insurers.

Several factors impact on premium pricing. They range from the personal i.e. the situation you are in, to the benefit level you require.

Other variables exist that you have no control over like Insurance fraud, a factor that affects everyone’s premiums. Consumers need to realise that the honest subsidise the fraudulent by incurring higher premiums.

Another variable. Premiums invested in the stock market create a stockpile in order to pay out claims. It is more prevalent in other forms of insurance but applies to car insurance too.

Where you live and park also affects your monthly payments. Similarly, the use of security measures such as trackers and alarms reduce premiums.

So does Car Insurance work in South Africa?

Does Car Insurance work

Experience and age are other factors, as drivers who are newly qualified attract higher premiums than older drivers who are more experienced. The implication also affects parents looking to adding their teenagers onto their policy, as the premiums are priced higher.

Those who have undergone specialised courses such as advanced driving courses attract lower premiums.

Occupation determines premiums, in so far as a racing driver would pay more than a managing director. Your claim history also counts, as those who claim less, pay less.

Excess, the money you pay to cover unforeseen repairs, also affects premium pricing, The more excess you are willing to pay, the less your premium. Your car’s insurance and value category is another feature that affects your premium quote.

Powerful or expensive luxury cars are the most costly to insure.

So how does Car Insurance work?

Insurance premiums get compiled and split into the following categories:

  • 50% to claim payments
  • 25% to administrative and legal costs
  • 25% to company running costs


The figures may differ from one insurer to the next, depending on a firm’s ability to rein in overheads.

There are ways you can manage your insurance costs. Look for a better deal by shopping around as vehicle values depreciate over time.

Assess whether you really need the optional extras that are available. For example, in the case of a write-off, is a rental vehicle an option? Is the use of it a payable extra? Is roadside assistance in case of a breakdown offered?

All optional extras affect your premiums. Shop around.

Your car insurance quote is available here. Please complete and send the form on this page so we can send you a personalised quote.

All info was correct at time of publishing November 7, 2018