There are just over 11 million registered vehicles in South Africa (excluding caravans and trailers). According to statistics, the majority of these vehicles – around 60-70% are uninsured. This means that to keep you on the road, insurance is not a luxury, but a necessity.

Statistics from the Road Traffic Management Corporation (RTMC) indicate there are more than 800 000 crashes in South Africa annually¹. Based on the insurance statistics, this equates to around 520 000 cars which are involved in crashes and which are uninsured.

And, those motorists who are opting to have insurance, are often choosing insurance based on the lowest available premiums, rather than understanding the benefits and disadvantages of the insurance they are considering buying.

It is sometimes difficult to get insurance which matches your pocket, and which gives you the cover you need or want. For this reason, it is necessary for motorists to read their policies carefully, and to understand all the aspects of the insurance they are planning on taking. Too often, low premiums sound good but fall short when claims are made.

A good example is an excess fee which may be payable when a claim is made. An excess is a fee you pay towards a claim for loss or damage to your car, regardless of who is to blame.

A company offering a low monthly premium, for instance, may require a substantial excess in the case of loss or damage.

When this happens some people are shocked when the costs of repair to a vehicle may be carried entirely, or in part, through the excess fee, with little or no money being paid by the insurer. Lower monthly premiums, in this case, will not count for much as the motorist still has to pay a big portion of the costs out of their own pocket.

Motorists who want to insure their vehicles must understand the terminology of their contracts, and ask for clarification of any unclear clauses before committing to a specific insurance policy.

Critical questions to ask when considering insurance are:

What is my excess? Is there a different excess for loss and for damage?

Is the excess a flat rate, or is it calculated as a percentage of the loss or damage?

Besides the initial excess fee, are there any additional excess fees payable when I make a claim?

Are there any penalties for claiming within the first six months, or in the first year? (If there are, determine exactly what these penalties are)

What is the turnaround time for claims?

Will I be covered if other people drive my car? (And, if you are covered, is there a difference in the coverage if the car was driven by an 18-year-old driver or a 45-year-old driver?)

Is my car covered for resale or full retail value?

Is this insurance comprehensive insurance?

Are there any limitations on where or when I can drive my car?

If something happens to my car, is car hire included in my cover while it is being repaired or replaced

Insurance is a necessity but it is more important that when taking out insurance motorists understand exactly what they are getting, and how much it will cost them if they do claim.

1Costs of Crashes in South Africa, Research and Development Report (August 2016), Road Traffic Management Corporation.