Transport Month: A quick guide to ensuring your car insurance is road ready

Having your own set of wheels makes getting from point A to point B so much quicker and easier. However, along with the convenience that comes with being a car owner, the risks of the road are all too real.

Car insurance has long been one of the most effective ways of preventing the financial fallout of car damage or a write-off, but with so many options, choosing the right policy can be daunting. The key to making the most informed decision lies in gaining a good understanding of the risks and what can be done to manage them proactively.

Road risks: know the facts and the figures
According to Sanral’s most recent report, there are over 800 000 road accidents in South Africa every year – averaging at around 2200 crashes every day. Many of these accidents are attributed to excess speed and driving under the influence of alcohol. The unfortunate reality is that even responsible motorists who abide by the speed limits and practice safe driving can be impacted by fellow drivers who are careless and reckless.

In addition, the South African Police Service found that carjacking, as a sub-category of aggravated robbery decreased by 0.9% during the second quarter of 2024, when compared to the same period last year. While the decrease is encouraging, the fact that 5438 incidents of carjacking took place in 2024 is still alarming, given that cases of carjacking have exceeded 5000 year-on-year since 2021. Furthermore, 46% of carjacking incidents involve sedans, hatchbacks and coupes, which alarmingly, are the vehicles that most car owners drive.

Another factor making life hard for car owners is the deteriorating state of road infrastructure. The AA has pinned a large proportion of the country’s dangerous road safety record on the poor state of roads across several provinces. Lack of maintenance and the rising occurrence of extreme weather has wreaked havoc on many of the country’s highways and frequently used roads.

For Marius Kemp, Head: Personal Underwriting at Santam, these findings paint a picture of a road travel environment that is becoming increasingly hazardous for car owners. “These realities, coupled with the strained economic climate has placed many South Africans under undue financial pressure. Many people simply cannot afford the cost of repairs or complete replacements if they become victims of a car-related crime or are involved in an accident.

When you need it most, car insurance can relieve a large part of this financial burden. By choosing your car insurance carefully and working closely with your adviser, you can ensure that you get the cover you need for your unique set of circumstances and budget.”

Factors to consider when choosing your cover
In choosing the right kind of car insurance, you will need to carefully weigh up the benefits and the costs of the various options. While the nature and extent of insurance cover will differ from insurer to insurer, limited cover options usually include third-party only cover and cover for specific events such as fire, theft and hijacking.

Third-party liability cover will pay out in the event that a third party lodges a claim against you for loss or damage they have incurred due to your actions. For example, if you are responsible for a car crash, the third party would be the person whose car is damaged or destroyed in the process.

Third-party insurance however, does not cover your loss if you have an accident. In other words, any damage to your own car or other property of yours is not covered, and you would have to pay for it out of your own pocket.
Likewise, policies that cover certain events such as fire, theft or hijacking will provide cover only for the events listed in the policy, which will also be subject to certain terms and conditions.

These limited types of policies may be attractive to you if you have an older, low-value vehicle, and it is paid off, and/or you don’t drive the car very often or very far. Limited cover is typically less expensive than a comprehensive insurance policy, but in many ways, the benefits of comprehensive insurance far outweigh the cost.

“Comprehensive car insurance provides extensive coverage that protects against damage to your vehicle from collision and non-collision events such as theft, vandalism, fire, or natural disasters. It also covers repairs or replacements if your car is damaged by animals or falling objects. This type of policy ensures peace of mind by offering broader protection than basic liability insurance, reducing the financial burden of unexpected incidents,” says Kemp.

Retail vs market value
Once you’ve made a decision on the kind of car insurance you need, you will need to decide which value you would like to insure your vehicle for. The TransUnion retail value of a car is the average price a car dealer would sell it for. Therefore, if your car is insured for its TransUnion retail value, it might not be adequately insured to replace it with a similar make and model in the event of theft or a complete write-off.

In contrast, the market value of a car equates to the price you would likely fetch for it if you sold it privately. This value takes into account a number of variables, including mileage, vehicle condition, service history and prevailing market conditions.

As Kemp concludes: “With Santam’s standard comprehensive vehicle cover, you will be paid out the reasonable market value always limited to the insured amount of your car.

Making sure you have adequate cover will provide you with much-needed peace of mind that if the unexpected occurs, you’ll have the financial fix you need to keep your wheels on the road.”