Third party, fire and theft car insurance

A third party, fire and theft vehicle policy falls between comprehensive cover and limited liability, both in the level of cover and its price, so it’s worth carefully considering if this kind of policy is most suitable for your needs. Unlike comprehensive cover, which covers all your costs and those incurred by others minus your excess, third party, fire and theft is cheaper because it offers much more basic coverage, covering the costs of accidental damage that you have caused to another’s vehicle or property, plus damage your car suffers in the event of theft, fire or hijacking.

In This Guide:

What does third party, fire and theft car insurance cover exactly?

In case of an accident in the vehicle listed on your third party, fire and theft insurance policy, the following is covered:

  • 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
  • The theft or hijacking of your vehicle
  • Damage to your vehicle caused by a fire

As there is limited cover included for your own vehicle, third party, fire and theft coverage is only really recommended if your car is older and of low value, or fully paid off, making it not worth investing in comprehensive cover for it. It can also be appropriate if you rarely use your car, or only drive it short distances, as the risk of having an accident is very low.

Who is the third party?

The third party is anybody making a claim against you after suffering negative consequences due to a vehicle accident that you caused. This can include injuries, or when their property is damaged due to your actions in your vehicle.

You, as the insurance policyholder, are known as the first party, while your insurer is the second party, responsible for settling the claim. In the case of car insurance, the third party is most often the driver of a car that becomes involved in an accident that you caused. The third-party can also be a business, for example, a shop that is damaged by you crashing into it. Some insurers exclude specific people from their third party policies, for example, members of your household, so as with all contracts, it’s important to check the fine print carefully.

What is not covered by third party, fire and theft insurance?

Third party, fire and theft cover only covers accidental damage caused to third parties by your accident, plus your costs incurred by a fire, or the theft or hijacking of your vehicle. You have to cover the cost of replacing or repairing your car due to accidental damage out of your own pocket. If an accident is not your fault, you can claim against the person who did cause it, as a third party in that case.

On occasion, an insurer will assess that the fault cannot be attributed to only one party, for example, if you hit another car due to not properly looking, it may be decided that the other party who you hit did not do enough to avoid the accident themselves. For these incidents, the insurer follows the principles of Apportionment of Damages, which means they will decide the level of fault each party must accept and payout on this basis.

How does the road accident fund affect third party, fire and theft cover?

Since 1997 the Road Accident Fund (RAF) has been available in South Africa to provide monetary compensation to anyone injured in a road accident in the country. This covers you for any injuries to a third party, but it still doesn’t cover the costs of any damage to their vehicle.

Third party car insurance is not compulsory in South Africa. The South Africa Insurance Association (SAIA) argues should be made mandatory, as, at the moment, some drivers rely solely on the RAF for their insurance needs, which puts their vehicle at risk and drives up insurance costs overall. Third party insurance covers damage to property, along with personal liability for an accident that takes place in another country, which the RAF does not cover. You’re also covered should someone make a claim for ‘emotional shock’ which is not covered by the RAF. Adding fire and theft coverage to your third party policy further extends your cover, so in many cases, you can get your vehicle repaired or replaced without having to foot the bill yourself.

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