There are basically two types of car insurance – comprehensive car insurance and third party car insurance. The best option is comprehensive car insurance which covers you for all eventualities whether it is accident damage or loss of your vehicle. It also covers the accident damage to the other party’s vehicle if you were at fault. Third party car insurance only covers the damages to the other party’s vehicle and you are responsible for your own costs. Then there is the in-between option which could be termed basic car insurance. It is not as basic as third party insurance (3rd party) though because your vehicle is also covered, but only for theft and fire. Basic car insurance with 3rd party, fire and theft is not suitable cover if you have a vehicle that is still under finance. You are required as part of your finance agreement to have comprehensive car insurance at least until you have paid off the car.

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What is 3rd Party Cover?

If you are in a car accident, the party responsible for the fender bender is liable for the costs. Let us assume that you were at fault in a collision and both you and the 3rd party has car insurance. In the short term, your car insurance will pay for the accident damage repair for your vehicle. The other party’s car insurance will pay for their repairs. However, their car insurance company will then claim from your car insurance company since it is your fault. This happens over a period of weeks and month after the actual damage and you as the insured do not even know that it has occurred.

Insurance is there to protect you against the financial implications and car insurance does just that. If you did not have car insurance though, then you will have to pay out of your own pocket for the damages to the other party’s vehicle. This other party or parties is the 3rd party. The accident damage can be staggering. While you may only be able to afford a budget car and have cheaper accident damage repairs, the 3rd party vehicle may be the top of the range luxury car with exorbitant costs for repairs. Fortunately with 3rd party cover you do not have to be too concerned whether the other person drives a 10 year old Toyota Corolla or the latest Mercedes S-class.

Theft and Fire Cover

Now in traditional 3rd party cover, only the other person’s accident damage is paid for by your insurance company. You still have to pay out of your own pocket for repairing your own car or just drive around your beat up vehicle. Even if you car was stolen, hijacked or burnt to the ground, you would not be covered with the traditional 3rd party cover. However, the in-between policies what we can call basic car insurance does cover you for some eventualities, but not all. It has fire and theft cover for your vehicle.

Stolen or Hijacked Car

The fact of the matter is that crime is high in South Africa – nobody can deny this. Vehicle-related crimes are one of the top ranking criminal acts. South African criminals are a brazen bunch and do not just steal parked vehicles but hijack drivers even at the busiest intersection. The bottom line is that if you are a South Africa car owner, you are at risk of losing your car either through theft or hijacking. This is where basic car insurance has you covered – the car insurance will payout for loss of the vehicle whether stolen or carjacked.

Burnt and Destroyed Car

The fire cover of your basic car insurance policy goes a little beyond the actual burning down of your vehicle. Depending on the policy and your insurance provider, it may also cover you for other situations where your vehicle may be destroyed provided that it is not written off in an accident. The reality is that losing your car in these ways is unlikely. It may catch alight. Your neighbour’s wall may collapse on your vehicle. A massive tree branch may crush it. Unlikely but possible. This is where you need the additional fire cover. In South Africa, it may not be as unlikely if you are unfortunate enough to be in the middle of toyi-toying protesters or striking workers where vehicles are sometimes torched or smashed by angry mobs.