Choosing how to insure your car is one of the biggest financial decisions you make after buying the vehicle itself. Get it right, and you protect your budget from nasty surprises. Get it wrong — or worse, drive without cover — and a single accident could cost more than the car is worth.
This guide explains the differences between Comprehensive and Third-Party cover in clear, practical terms, and helps you decide which option fits your car, your risk, and your wallet.
Quick answer
- If your car is financed: you will almost always be contractually required by the bank to have Comprehensive cover.
- If your car is paid off and modest in value: Third-Party (or Third-Party, Fire & Theft) can make financial sense — especially if you could afford to replace your own car but could not comfortably pay for someone else’s repairs.
- If you drive a newer or higher-value car, park on the street, or commute long distances: Comprehensive is the safer and usually smarter choice.
- If you drive with no insurance at all: you are taking a major financial risk in a country where many motorists are uninsured and claims for other people’s damage can land squarely on you.
The South African context (why this decision matters)
South Africa does not have compulsory motor insurance for damage to other people’s property. Instead, the Road Accident Fund (RAF) compensates for injury or death resulting from the negligent use of a motor vehicle on a road. The RAF does not pay for damaged cars, walls, gates, or other property. If you crash into someone’s vehicle and you are negligent, you can be held liable for their repair costs — and you would need to pay this yourself unless you carry Third-Party liability cover.
At the same time, a large proportion of drivers on our roads are uninsured. That means if an uninsured driver crashes into you, you may struggle to recover your losses in practice. Insurance is therefore not just about repairing your car; it is a strategy for protecting your household finances in a high-risk environment.
What each policy actually covers
1) Comprehensive insurance (the broadest protection)
What it usually includes:
- Damage to your own vehicle from collisions (regardless of who is at fault).
- Theft or hijacking, and attempted theft damage.
- Fire, explosion, and often natural perils such as hail, storm, and flood.
- Third-party liability (damage you cause to others’ cars or property).
- Extras on many policies: windscreen cover, sound system cover, car-hire, roadside assistance, and sometimes accidental damage while parked.
Who it suits:
- Financed, newer, or higher-value vehicles.
- Drivers who cannot afford to self-insure major losses.
- People living or working in higher-risk areas for theft, hijacking, hail, or flooding.
Important to know:
Comprehensive insurance is a contractual must for most financed cars for the duration of the credit agreement. Cancelling it mid-loan can place you in breach of your finance contract.
2) Third-Party Only (TPO)
What it usually includes:
- Your legal liability for damage to other people’s property (for example, their car, boundary wall, or a municipal pole) when you are at fault.
What it does not include:
- Damage to your own car in a collision you caused.
- Theft, hijacking, or fire of your vehicle.
Who it suits:
- Paid-off, low-market-value cars where replacing or repairing your own car is manageable, but paying someone else’s R150 000 repair bill would be devastating.
- Very low-mileage drivers with conservative risk profiles and secure parking.
Why it exists in South Africa:
Because the RAF handles injury and death claims (not property), Third-Party fills the gap for property damage you cause.
3) Third-Party, Fire & Theft (TPFT)
A middle option.
What it usually includes:
- Third-Party liability plus theft/hijacking and fire for your car.
- No cover for your own collision damage.
Who it suits:
- Cars of moderate value where your biggest concerns are theft or hijacking, but you can accept the risk of paying for repairs to your own car after a crash.
A side-by-side comparison
| Feature / Risk | Comprehensive | Third-Party, Fire & Theft | Third-Party Only |
|---|---|---|---|
| Your car’s accidental damage (you at fault) | Yes | No | No |
| Your car’s theft or hijacking | Yes | Yes | No |
| Your car’s fire | Yes | Yes | No |
| Damage you cause to others’ property | Yes | Yes | Yes |
| Hail, storm, flood | Usually yes | Usually no | No |
| Windscreen (specified) | Often included | Optional/No | Optional/No |
| Typical premium | Highest | Middle | Lowest |
| Required by lenders on financed cars | Yes | No | No |
Always check your policy wording; benefits differ by insurer.
Premiums, excesses, and what really moves the price
Your premium is mainly driven by:
- Vehicle risk profile: make and model, cost of parts, technology, and theft attractiveness.
- Where you keep it: street versus garage, suburb risk, nightly parking.
- Your usage: commute distance, annual kilometres, business versus private use.
- Driver profile: age, prior claims, licence history, and listed regular driver.
- Security: tracking device, immobiliser, gear-lock, alarm.
- Excess choices: higher excess usually means lower premium (and vice versa).
South African rules also require insurers to disclose key information upfront — excesses, significant exclusions, cooling-off rights, fees and charges, and how to complain — so read your Policy Schedule and Policy Wording carefully before you sign.
How claims and third-party liability actually work
- If you cause an accident, the other driver typically claims from you for their property damage. Your insurer then steps in to defend and, if appropriate, settle on your behalf within policy limits.
- With Third-Party cover, your insurer handles negotiations, settlement, legal defence, and payouts for the third-party loss.
- With Comprehensive, the insurer also repairs or cash-settles your car’s damage from insured events.
- If someone else causes damage to you and they are insured, their insurer may settle your claim against them. If they are uninsured, you may need to claim from them personally or through the courts, which can be slow and uncertain.
- After paying your claim, your insurer may subrogate — that is, seek to recover from the at-fault party.
RAF reminder: If anyone is injured or killed, the RAF system addresses specified losses related to injury or death. Your broken bumper or damaged gate is not covered by the RAF and remains a property matter for insurers or the courts.
Bank finance and the regulatory backdrop
- Banks and vehicle finance: Lenders hold title to the car during your loan term and commonly require proof of Comprehensive insurance for the duration of the agreement. Cancelling cover can breach the contract.
- Insurance regulation: The Insurance Act, 2017 sets prudential standards for insurers, and the Policyholder Protection Rules set out conduct and disclosure requirements.
- Disputes: If you cannot resolve a complaint with your insurer, you can escalate to the National Financial Ombud Scheme for a free, independent view.
When Comprehensive is clearly worth it
Choose Comprehensive if any of these ring true:
- Your car is financed, new, or high value. Repair costs for modern vehicles — sensors, body panels, airbags, and ADAS components — can be high. One moderate crash can exceed years of premiums.
- You cannot cash-flow a major loss. If a write-off or theft would derail your finances, you are the exact person Comprehensive is designed to protect.
- You drive or park in high-exposure contexts. Daily commuting on congested routes, regular night-time driving, parking on the street, or living in theft or hail hotspots tilt the mathematics toward Comprehensive.
- You value add-ons like car-hire, windscreen cover, or roadside assistance packaged at better rates under a Comprehensive plan.
When Third-Party (or TPFT) can be better value
Consider Third-Party or TPFT if:
- Your car is paid off and low value. If the annual Comprehensive premium plus likely excess represents a large percentage of the car’s market value, you may be better off self-insuring collision damage and only protecting against third-party claims (and perhaps theft and fire with TPFT).
- You could replace or repair your car yourself, but you could not comfortably pay for someone else’s R120 000 repair bill.
- You are a low-mileage, cautious driver with secure parking and a clean record — your probability of causing a claim is lower, so Third-Party can be efficient.
A simple decision framework you can use today
- Is the car financed?
- Yes: Get Comprehensive.
- No: Continue.
- Could you pay for your own car’s total loss tomorrow?
- No: Get Comprehensive (or at least TPFT if budget is tight).
- Yes: Continue.
- Could you pay for somebody else’s R150 000 repair bill if you crash into them?
- No: Get Third-Party at minimum (ideally TPFT).
- Yes: Continue.
- What is the ratio of annual comprehensive premium to your car’s market value?
- If high (for example, eight to ten percent or more, including excess assumptions), lean to TPFT or Third-Party.
- If moderate or low, Comprehensive may be good value.
- Your exposure:
- High (street parking, long commutes, heavy traffic, high-risk area): Comprehensive.
- Low (garage, low mileage, conservative routes): TPFT or Third-Party may be sensible.
Case-study maths (illustrative only)
Lebo drives a paid-off 12-year-old hatch worth R70 000. A Comprehensive quote is R1 050 per month with a R4 000 excess. TPFT is R260 per month with a R2 500 excess.
• Over a year, Comprehensive ≈ R12 600; TPFT ≈ R3 120.
• If the car is stolen, TPFT and Comprehensive both pay (subject to terms).
• If Lebo crashes into a premium SUV, both policies protect against third-party damage.
• If Lebo crashes and his own car needs R30 000 repairs, only Comprehensive pays.Conclusion: If Lebo cannot absorb a R30 000 hit or a total loss, Comprehensive is justified; if he can, TPFT may offer better long-term value.
(Figures are examples; compare real quotes and excesses.)
Powerful add-ons and options to consider
- Excess buy-down or waiver: Pay a little more each month to reduce the excess payable at claim time.
- Credit shortfall (gap) cover: If your financed car is written off and the finance settlement exceeds the car’s value, this can cover the shortfall (often sold as a separate policy).
- Car-hire: Keeps you mobile while your car is repaired or assessed.
- Windscreen cover: Valuable if you often drive on gravel or through construction zones.
- Roadside assistance: Often bundled, but check towing limits, distance caps, and call-out fees.
Common pitfalls that lead to claims being rejected
- Non-disclosure or misrepresentation (for example, incorrect regular driver, undeclared modifications).
- Unroadworthy vehicle (bald tyres, failed brakes, or other safety defects).
- Unauthorised driver or use outside declared purpose (business versus private).
- Driving under the influence or reckless driving.
- Non-payment of premiums leading to lapse or missed grace periods.
The Policyholder Protection Rules require clear disclosure of major exclusions and your excesses before you enter into the policy. Read those sections carefully so there are no surprises.
What happens if you have no insurance?
- If you cause an accident, you can be personally liable for all third-party property damage.
- If you are the victim and the other driver is uninsured, you may need to pursue them directly (letters of demand, Small Claims Court for low amounts, or civil litigation for larger claims), which is often slow and uncertain.
- Injuries and deaths are handled by the RAF under specific rules, limits, and timeframes, but your damaged car and cracked wall are not.
If you have a dispute with your insurer, escalate it through the insurer’s complaints process. If that does not resolve it, you can approach the National Financial Ombud Scheme.
Frequently asked questions
Is car insurance compulsory by law in South Africa?
No. However, banks make Comprehensive cover contractual on financed cars, and Third-Party cover is strongly recommended to protect you against liability to others.
Does the RAF replace my damaged car?
No. The RAF deals with injury and death, not vehicle or property damage.
Can the other driver claim directly from my insurer?
Generally, third parties claim against you, not your insurer, unless your insurer takes over your defence or settlement.
What if the accident is not my fault and the other driver is uninsured?
You can pursue them directly. Practically, recovery can be difficult; one major reason many people choose Comprehensive cover is to avoid relying on an uninsured third party’s ability to pay.
What is subrogation?
After paying your claim, your insurer may recover or attempt to recover from the at-fault party to reduce losses.
Bottom line: Which should you choose?
- Pick Comprehensive if your car is financed, valuable, or losing it would jeopardise your finances. It protects you and others, covers the widest range of risks, and keeps your lender satisfied.
- Pick Third-Party (or TPFT) if your car is modest in value, fully paid, securely parked, and you are comfortable self-insuring damage to your vehicle — but you still want strong protection against other people’s claims.
- Whatever you choose, read the policy wording, compare excesses (not just premiums), and make sure the cover matches how you actually use the car. If in doubt, ask the insurer or broker to put answers in writing.
William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends.
You can contact him on william@rateweb.co.za
