Third party car insurance
There are different levels of car insurance available, so it’s important to understand what each type covers to find the best policy for your particular needs. While the highest level of cover is known as comprehensive, this is also the most expensive, as it covers all damages and losses you experience, whether through accident, fire, or theft, subject to certain conditions and minus your chosen level of excess, while also covering the losses incurred by other parties. Lower standards of cover on offer typically only cover some of your losses or those of others, through third party, fire and theft cover, and third party cover. Below we detail exactly what cover to expect from third party insurance.
In This Guide:
- What does third party car insurance cover?
- Who is the third party?
- What is not covered by third party insurance?
- How does the road accident fund (raf) affect third party cover?
What does third party car insurance cover?
If you are responsible for a car accident in the vehicle that is listed on your third party insurance policy, your policy will cover the following:
- An injury suffered by a passenger in your car, or a person in another car involved in the accident
- The cost of the repairs or replacement of the other car
- The cost of rectifying the damage done to someone else’s property
As there is no cover included for your own vehicle, third party-only cover may be appealing if your car is older and of low value, and you think it’s not worth investing in comprehensive cover for it, or if you rarely use your car, or only use it for short distances, making the risk of accident very low.
The main benefit of third party insurance cover is that it insures you against the huge costs you could incur if you damage someone else’s expensive vehicle in an accident.
Who is the third party?
In the case of an insurance claim, the third party is anyone who makes a claim against you after being negatively affected by a vehicle accident that you caused, for example, due to sustaining an injury, or if their property has suffered damage as a result of your actions.
You, the insured, are known as the first party, while your insurer is the second party, which must settle the claim. With car insurance, the driver of the other car involved in an accident that was your fault is usually the third party. It could also be a business, for example, you causing damage by driving into a store window. Sometimes policies exclude specific people, such as members of your household, when defining the third party, so as with all insurance, it’s important to check the fine print.
What is not covered by third party insurance?
Third party insurance only covers the losses experienced by others. If your own car or property is damaged due to an accident, theft or fire, or you are injured, this is not covered and you'd have to raise funds to pay those costs yourself. However, if someone else caused the accident or damage, you can bring a claim against them, as a third party.
Sometimes the fault is not entirely that of one party, for example, if you hit a car after reversing without looking, some of the fault may lie with the other party who did not take action to avoid the collision. For these cases, the insurance company will follow principles known as the "apportionment of damages" and set a payout according to the level of fault which applies to each party.
How does the road accident fund (raf) affect third party cover?
The Road Accident Fund was established by the South African government in 1997 to provide financial compensation to road users who are injured as a result of a road accident in South Africa. This means if you cause an accident, you are covered for any injuries to a third party. However, it does not cover any damage incurred to their property, such as their car. Third party insurance policies do cover property damage, and also personal liability for an incident that occurs outside of South Africa. They also provide cover in case of a claim for ‘emotional shock’ by someone who wasn't directly involved in an accident, which isn't covered by the RAF.
While third party insurance is not compulsory for drivers in South Africa, the South Africa Insurance Association (SAIA) has been calling for it to be made so since 2011. The SAIA argues that the costs of insurance would decrease if everyone was insured, plus there’d be more money available to repair damaged vehicles on the road.