Why should you have car insurance?

It’s a big day when you finally hold the keys to your first vehicle. Your future looks bright, and you plan to take road trips with your friends and visit far-away relatives.

However, this vision can be shattered if you’re involved in an accident. To reduce the impact on your pocket, you should invest in insurance. We have a look at why car insurance is so important, and how you can apply for it today.

Why should you get car insurance?

In spite of being a depreciating asset, which means that the asset loses value over time, vehicles are often the second most expensive asset people own, their homes being the first. 

Therefore, your car will be both expensive and slowly dropping in value. To add to this, after a certain number of years, manufacturers will stop producing spare parts for your vehicle model. As a result of this shortage, parts will become more expensive, should they need replacement because of an incident with your vehicle.

Considering all of these factors, driving around without car insurance is a massive risk. Even though insurance is not compulsory in South Africa, you could land yourself in serious debt if you’re ever involved in an accident.

Car insurance is usually divided into three options, which cater to your personal risk profile:

• Third-party insurance: This is the most basic insurance option, and it simply protects you from liability if you cause damage to another person’s property, such as their vehicle.
• Third-party, fire and theft insurance: This covers the same as third-party insurance, but it also covers you if your vehicle has fire damage or someone breaks into it.
• Comprehensive insurance: This includes the same as both of the above, as well as the cost of the damage to your vehicle should you be involved in an accident.

If you only plan to use your car every now and then, you could get away with only having third-party insurance. However, if you spend every day on the road, or you just want to be cautious, it makes more sense to take out comprehensive insurance.