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“Deciding which car insurance policy is right for you is all about looking at your budget, your lifestyle, the amount of cash you have easy access to, the value of your car and your tolerance for risk” says Sumarie Greybe, co-founder at Naked the AI-driven car and home insurance platform.

Broadly speaking, there are five major categories of car insurance available in South Africa — third-party only, comprehensive, comprehensive with CoverPause, partial and third-party, fire and theft. 

Let’s look at the sort of circumstances and driver each of them is best suited to. 

1. Third-party only cover: Your car is old and has a low book value 

If you have an old car with a low book value—say, less than R30,000—it is often not worth your while to get a comprehensive insurance policy. In this instance, it often makes sense to get a third-party only policy, which will have far lower premiums. Such a policy provides cover for damage your car causes to the property of others (a car, a house, or even state property like the traffic light) in an accident where you were legally liable. However, you will not be covered for the theft of your car, or if it is damaged in an accident. 

You should not drive your car without a third-party policy at the very least. Without cover, another driver or their insurance provider can sue you for the damage your car caused if you were at fault in an accident. You could even find yourself paying off the repairs on someone’s BMW for years.

TIP: Make sure you have enough third-party cover. The standard level of cover is R5 million, which should keep you covered even if you are in a collision with multiple luxury SUVs. Also, try to save some of your own cash in an emergency fund that you can use to pay for repairs or use as a deposit for another car if something happens to your own vehicle. 

2. Comprehensive cover: You need the highest level of protection for your car

Most people can’t afford to simply purchase a new car if something happens to their old one, at least not without borrowing money or dipping into their savings. If losing your car would represent a significant financial setback, you will want to look at comprehensive insurance. Comprehensive insurance covers you for the loss – or damage to – your own car as well as for third party liability.

If you financed the vehicle purchase, the bank will typically insist you get comprehensive cover. No lender wants a situation where you are not making your car repayments, yet it can’t repossess the vehicle because it was stolen or written off. Comprehensive policies usually have an excess – an amount you must pay towards repair or replacement of the car when you claim after it is stolen or damaged.  

TIP: Reduce your uncertainty by choosing an excess level that fits your budget (budget for two accidents per year), and check that your provider does not have “additional excess” penalties (extra amounts you have to pay in instances like driving at night, or having an accident in the first couple of months).

3. Comprehensive with CoverPause: Your car stands still for days at a time

Not every car gets driven every day. Perhaps you use public transport during the week and only drive your own car over the weekend. Or maybe your family uses only one of its two cars on the weekend, has a car stored at the holiday home or leaves one car at home when embarking on the annual holiday. If so, look at a comprehensive, policy with CoverPause (only available from Naked). 

This policy lets you use a mobile app to “pause” the accident portion of your cover (and pay less) for the days that you are not driving it. You remain covered for theft, weather related damage or unforeseen events such as someone pushing an airport trolley into your car. You have to switch on your full cover before you start driving again.

TIP: The saving only kicks in if the car is paused for longer than a full calendar day. If you won’t be driving on the weekend, press “pause” late on Friday evening, and only press “resume” on Monday morning to qualify for two full days of savings.

4. Partial cover: You want to take on more risk yourself and save on your premiums 

If you have cash on hand to pay for a big portion of the repairs to your car in the event of an accident, you can choose a partial cover policy. Such a policy allows you to reduce the premium by only covering a certain percentage of the damage. In effect, you are choosing to make your excess a percentage (for example, 10%) of the value of the repair, rather than making it a fixed sum like R5,000 or R10,000. Most finance providers will not allow you to cover your car for less than 90% of the cost of repairs or replacement.

TIP: Beware of going too low. For example, if you choose a 50% policy, you won’t get much back for a smaller claim (only R10,000 for a R20,000), yet be on the hook for big shortfall on a larger claim (on a R200,000 claim, you will have to pay R100,000 yourself).

5. Third-party, fire and theft cover:You can’t afford comprehensive, but want to protect yourself against these specific events

Imagine you’re driving a 10-year old car worth R45,000. You rely on the car and would struggle to replace it if was stolen. Yet comprehensive cover is too expensive, and you don’t mind too much it collects another dent or scratch. Then a third-party, fire and theft policy could make sense for you. It gives you third party cover, plus cover for theft and fire. You are taking the chance that you will not write off your car in an accident, but this is a lower-risk event than theft. 

TIP: For cars that are parked for long periods, it may be better to buy comprehensive cover that offers a pause option when it’s not in use. If your car is low value and you are mostly worried about the R5 million risk of liability, it may be better to buy third party-only cover and build a small emergency fund to help with repairs or replacement of your own car.