Shopping around for an insurance policy for your car can sometimes be quite confusing, especially for the first timers. The term ‘comprehensive insurance’ gets thrown around frequently when speaking about car insurance, but what exactly does it mean? In short, comprehensive cover is the highest level of cover a policy holder can have if they take out motor insurance in South Africa, but it might not be as all-inclusive or simple as you think!
Insurance companies do not use a laid out set of rules which they all follow, hence comprehensive coverage can be interpreted in many different ways. In general, by taking out comprehensive insurance, you are not only covered for third party claims in the event of an incident, but are also covered for damage caused to your own vehicle as well as theft, fire or other ‘Acts of God’ that might be separately specified. Because of the extent of the cover, comprehensive is the most expensive type of car insurance.
When is it advisable to take out comprehensive car insurance?
Comprehensive car insurance, or any type of insurance for that matter, is currently not required by law in South Africa as it is in most other countries. However, a good insurance policy provides complete peace of mind by being financially and legally covered should you be involved in an accident or be a victim of car theft.
If you purchase a new car, it is very sensible to take out comprehensive car insurance, but if your car is an old model with a low market value, the added cost for comprehensive coverage may not be worth it and ‘Third party’ insurance might be more suitable to you. If you take out a car loan, your loan provider may however stipulate that you take out a comprehensive coverage to protect their asset while it is being paid off.