Factors influencing car insurance policy ownership in South Africa
For as long as many people can remember, car insurance ownership rates in South Africa have been extremely low, with less than thirty percent of car owners having an insurance policy. This is largely due to the fact that having a car insurance policy in South Africa is not mandatory unless a car has been purchased using finance. However, in recent years automotive insurance policies have become increasingly popular. There are several reasons for the sudden growth in popularity of vehicular insurance.
Changes in vehicle ownership
Vehicle ownership is now more widespread, with many more people being able to own cars than would have been able to in previous years. As a result, many older people are beginning to purchase cars, and want to ensure that their investment is protect. Taking out a car insurance policy is a great way of ensuring that they are protected in the event of an accident or theft or damage.
More foreign cars on the roads
Changes in South Africans’ financial circumstances mean that there are now many foreign cars on the roads, with many car owners importing cars from Europe, or from Japan or Korea. Foreign cars such as Mercedes, BMWs, Toyotas, and Hondas are all expensive cars that are at high risk of being stolen or damaged, so the owners of these cars will often take out an auto insurance policy to protect their car in the event of criminal activity.
Concerns over theft or accident liability
While the Road Accident Fund nominally protects drivers in the event of an accident, the fund doesn’t protect against damage caused to another person’s car or property. In addition, accessing the fund can sometimes be a drawn-out process, and many people find it a better choice to take out car insurance rather than to rely on the fund. In addition, with increasing levels of theft and damage, as well as growing levels of road accidents, having an insurance policy is an excellent way to ensure peace of mind.
More competition among insurance companies
With the internet, automotive insurance companies have been able to expand their reach all through South Africa. Where many insurance companies were previously limited to their bricks-and-mortar place of business in major cities such as Johannesburg, Pretoria, or Capetown, they can now do business with clients all over South Africa. This growing competition means that vehicular insurance companies are battling with each other for business, which helps to keep costs low. These low cost policies, as well as the number of “budget” auto insurance providers on the market have revived interest in taking out automotive insurance policies, and many car owners are now opting to take out insurance policies of their own.
While vehicle insurance levels in South Africa remain low, the factors above point to the definite potential for a sudden jump in ownership rates. If you’re a car owner without an insurance policy, now is a great time to start searching online for the best type of insurance policy for your car.