What is third party car insurance and who does it suit best?

Ever heard the saying, “Anything that can go wrong, will go wrong.”? Accidents happen when you least expect them and taking preventative measures, like car insurance, is smart. If you're looking for affordable car insurance that covers the essentials, third party insurance may be what you're after.

We've summarised the fundamental facts to consider when comparing third party, fire and theft vehicle insurance and third party only cover. Keep reading to learn more about these different types of car insurance and protect yourself, whatever happens. 

What is third party insurance? 

Three different parties are involved when a car accident occurs: the first, second, and third parties. The first party is the insured person, the second is the insurance company, and the third is the aggrieved person or business. If you accidentally knock someone else's (the third parties') vehicle or property, your policy provider will reduce the financial liabilities.

To illustrate how third-party insurance works, let’s take Thomas Mood, owner of a 2006 Ford Bantam 1.3 model valued at R45,000. Thomas feels that his car is old and of low value, and he can afford to make repairs if it causes an accident.

Imagine that he crashes into the back of a relatively new Mercedes-Benz GLC 300d SUV worth R1 million. If Thomas has no car insurance, he will have to pay for the repairs of the Mercedes-Benz, his car, and any other accident-related costs. 

This unexpected cost is going to have a knock-on effect. He may have to use precious savings, sell personal items and cut back on things he and his family enjoys.  Third-party vehicle insurance is more affordable than comprehensive insurance, the annual premium you pay remains fixed and this is why. 

If Thomas had had third party car insurance cover when the accident occurred, his insurer would have taken care of the repairs on the Mercedes-Benz GLC 300d but wouldn't cover the repair costs on the Bantam.

Insurance companies like Auto & General know that Thomas might not be entirely at fault in the scenario above. However, unless you have a policy such as third party, fire and theft vehicle insurance or third party only cover, it'll be up to you to pay out of your own pocket. 

Who is third party car insurance for?

In South Africa, vehicle insurance isn’t yet compulsory. However, in some neighbouring countries, third party vehicle insurance is required by law. If you enjoy travelling to places like Victoria Falls in Zimbabwe, the Katse Dam in Lesotho or the Skeleton Coast of Namibia, you’ll need to have third-party car insurance.

It’s estimated that about 70% of registered vehicles on South African roads are uninsured This works out to be nearly 8 million vehicles. Thousands of these cars are low-value and old, but as we shared in the earlier story, having third party car insurance is smart. Mistakes can happen in an instant, which is why you should consider third party car insurance.

In what instances would third party car insurance not payout?

Insurance companies won’t cover you or your vehicle if you were driving beyond the legal limit under the influence of drugs or alcohol. Policy providers also won't payout if you have failed to mention endorsements on your driver’s license.

Which is better: third party car insurance only or third party, fire and theft vehicle cover? 

The two plans offer a very different level of protection which we will outline below. 

Third party, fire and theft car insurance

 Third party, fire and theft car liability insurance covers accidental damage to a third parties' vehicle or building. If you deliberately damage someone’s car or building, the insurance will not cover for the damages. 

This policy also covers you if your vehicle is burnt or stolen in a hijacking.

Pros of third party, fire and theft car insurance

• Cover for both accidental damage to a third parties' vehicle or building

• Cheaper than comprehensive vehicle insurance

• Burnt or stolen vehicles will be replaced

Cons of third party, fire and theft car insurance cover

• Your car isn’t covered for damages caused by hail or any other event not listed above. 

Third party only car insurance

Third party only car cover protects you against liability claims from third parties if you accidentally damage their vehicles or buildings. Unlike third party, fire and theft car insurance, third party only car insurance doesn’t cover the replacement of your vehicle if it’s stolen or damaged in a fire. 

Pros of third party car insurance only

• Saves you money and stress in case you accidentally damage someone else’s vehicle or building

• Low cost

Cons of third party car insurance only

• Doesn’t cover vehicle loss due to fire or theft and hijacking 

Get an affordable car insurance quote from Auto & General

 Third-party car insurance gives you peace of mind. At Auto & General, we will support you when accidents happen. Start by getting a quick insurance quote for third party car insurance only or third party, fire and theft vehicle cover from Auto & General without delay.