Third Party Insurance in South Africa. Learn what is Covered

For many South African motorists, insuring their vehicles is an important step to safeguarding against potential financial setbacks resulting from accidents. Comprehensive cover is the most encompassing, but it also comes at a premium price. This has led many to consider third party insurance as a cost-effective alternative. But what does this cover entail, and is it the right choice for you?  In this article we will take an in-depth look at this insurance, what it covers, what it does not cover and basic information needed to understand how the third party plan works. 

What is Third Party Insurance?

Third party car insurance is a civil liability insurance that is designed to cover all damages that may be caused to a vehicle, to the property of another person in the event of an accident or to the persons themselves. It is a fundamental cover, compulsory in many countries, which guarantees the car owner financial and legal protection when he or she is liable for damage caused to another person or vehicle. 

Who is third party car insurance best suited to?

1. Drivers with older vehicles that are not worth insuring fully comprehensive.
2. Those who drive infrequently or short distances.
3. Drivers with tight budgets who are looking for basic protection.

How does third party car insurance work?

Third-party car insurance policy mainly aims at reducing financial burden in case your car is involved in a road accident. In most cases, insurance companies will cover and compensate for damages caused by the policyholder to another driver or car during a road accident.

In the unfortunate event of an accident where you're at fault, third-party insurance steps in to cover the costs of repairing the other person's vehicle or property. This, however, does not cover any damage to your vehicle.

First, you must inform your insurer when your car causes an injury or damages another car or property. After informing the insurance company, you must raise a third-party claim with your policy issuer. The insurer will assess the damages and compensate the aggrieved person once they ascertain the claims.

Who is the third person?

Third party in auto insurance refers to a person or entity affected by the actions of the insured driver. Many people do not know the meaning of this term, so we will clarify who each of the actors involved in an accident are:

• First part: you, the policyholder.
• Second party: the insurance company.
• Third party: Any person or entity affected by your actions, be it a driver of another car or even a company whose property you may damage.

Example on how it works:

Imagine you're driving in a parking lot, and you accidentally reverse into another car, causing damage to its bumper. With Third Party Insurance, your insurer would compensate the other car owner for the bumper repair, while you would have to shoulder the costs of any damages to your vehicle.

What are the benefits of third party car insurance?

Before choosing to take out a cover, it is important that you know what the benefits are. Knowing every detail of the coverages you are evaluating will allow you to clearly analyse and choose the most suitable for your vehicle. Another advantage is that by knowing this, you will be able to make objective quotations and compare between the different options you are evaluating.

• Affordable: Premiums are usually lower than those of comprehensive insurance.
• Liability protection: Covers damage to third party property or vehicles.
• Peace of mind: You can rest assured that you will not have to face major expenses in the event of an accident.
• Saves you extra financial obligations: getting third-party insurance is the greatest doing you can do to your pocket. The policy saves you money by sorting damages and other third-party claims when you are involved in a road accident.
  
• Fast and easy to process: this type of insurance is easily accessible. Anyone can apply to renew this policy online; it takes a few minutes to fill in the necessary information and get a quote.

Why is it important to have third party car insurance?

Having third party car insurance is a way to be backed up and protected against any eventuality that may occur with your vehicle. Being insured guarantees the driver that if you are involved in an accident and are held responsible for it, you will not have to face financial costs, especially if the damage is significant, but the insurer will do it for you.

What does third party insurance cover?

Third party insurance, as mentioned, covers damage to another person's vehicle or property due to your actions. In addition, it also covers the costs associated with injury or death of third parties in an accident in which you are at fault.

It is for this reason that it is advisable to have at least this type of insurance, as, in the event of an accident, you will avoid having to pay out of pocket for the repair costs and/or medical costs of the person involved. 

Find the best insurance of South Africa

1. Damages to a third-party car
2. Injuries to the third-party
3. Third-party property
4. Injuries on passengers

What is not covered by Third Party Car Insurance?

To clarify a little more and clear up any doubts, this coverage does not take responsibility for:

1. Damage to your own vehicle.
2. Loss or damage to personal belongings inside your vehicle.
3. Accidents in which you are not at fault (claims are made against the at-fault party's insurance company).

How to quote a third party car insurance?

One of the best ways to get the best price for a third party car insurance is to use a car insurance quotation tool like the one we offer at Quotes Advisor. Using this type of tool you will get a quote from several insurers in seconds and for free, which will allow you to compare the different options and find the one that best suits your needs.

If you prefer to do it in person you should do the following:

1. Approach several insurers and compare quotes.
2. Be transparent about your driving record.
3. Consider adding more coverage options, such as fire and theft, for added protection.

Is third party insurance cheaper?

Indeed, third party insurance premiums are generally lower than third-party, fire and theft or comprehensive insurance premiums. This question is very frequently asked by our users, and it is important to clarify that although the cost is reduced compared to the other covers, it has limited protection.

Best insurers offering third party insurance

It is essential to research and compare offers. Premiums, customer reviews and claims handling procedures can vary from insurer to insurer. Here are some of the best third-party insurance companies:

1. Santam
2. Old Mutual
3. Momentum
4. King Price
5. Discovery
6. Dial Direct

Third-party insurance vs Comprehensive insurance

Conclusion

Although third party car insurance is affordable, it is essential to be aware of its limitations. If you have an older or low-value car or drive infrequently, it may be a suitable option. However, always consider the pros and cons depending on your personal circumstances. The main advice we can give you, and one we think you should always bear in mind, is to shop around with different insurers to get several quotes, consider the benefits each insurer gets and find the best option for you and your vehicle.

Frequently asked questions

What does third party insurance mean?

This refers to insurance that covers damage you cause to someone else's property, but not your own.

Is third party insurance compulsory?

As of my last update, third party car insurance is not compulsory in South Africa. However, SAIA has advocated for it to be compulsory.

What happens if a third party is not insured?

If an uninsured third party is at fault, they bear the cost of the damage. Conversely, if you are at fault and the third party is not insured, your third party insurance will not be claimable.

What happens if a third party is not insured?

The uninsured party will get compensated when they claim damages. On the other hand, you will need to foot your damages if you only have a third-party cover and all the bills if you are not covered.

Can Third-Party Car Insurance Claim Total Loss?

Well, third-party car insurance will only cover up to your car value. If you are involved with a car that is more expensive than your car, you will have to pay for the extra cost. If the third-party car value is less than your can value, the insurer will replace it if it's beyond repair.

Author: Cristian Rennella

Update: 01/09/2023