TL;DR - Our version of "I'm not reading all that, *SparkNotes pls."
- Understand the Factors: Your premium is influenced by various factors, including your driving history, vehicle type, and even your location. Knowing these can help you better manage your costs.
- Tailor Your Coverage: Choose the right level of coverage based on your needs. Comprehensive cover is more expensive but offers broader protection; third-party is cheaper but limited.
- Improve Your Risk Profile: Safe driving, installing security features, and maintaining a clean claims history can positively impact your premium.
- Regularly Review Your Policy: Life changes, and so should your insurance. Regularly reviewing your policy ensures you’re not overpaying for coverage you don’t need.
- Ask About Discounts: Don’t hesitate to ask your insurer about available discounts. Bundling policies or being a loyal customer can lead to significant savings.
What goes together like peanut butter and jam? Like a piña colada and a warm Saturday afternoon? Like a South African and laughing through the pain?
Your car and insurance, of course.
But we can’t talk about the importance of vehicle insurance without mentioning premiums.
In this article, Pineapple will give you an all-access pass to insurance premiums. You’ll understand what they are, why you pay them and how they’re calculated.
The aim is to provide in-depth information about car insurance premiums in South Africa, demystify the factors that influence the cost, and offer practical tips for saving money.
Or at least that’s what the brief we gave our copywriter says.
What Is A Car Insurance Premium?
A car insurance premium is the monthly fee you pay an insurance provider to have a policy with them. The premium is the cost of maintaining your insurance policy and keeping it valid.
The fee covers the cost of your policy’s benefits, which, depending on the insurer, can include towing, car hire, and emergency accommodation.
South African insurance providers typically require you to pay premiums with regular installments, typically on a monthly basis.
How are Car Insurance Premiums Calculated?
Calculating insurance premiums differs based on the insurer. However, the calculation is generally based on the personal details of your risk profile.
We asked a guy at work (not a rando; he’s an actual expert on such topics), and Ishmael, the Pineapple Product Training Facilitator, said these are the critical factors of a car insurance premium:
- Your car itself
Your vehicle’s make (brand) and model can heavily influence how much you pay in monthly premiums. High-risk cars (most targeted in hijackings and thefts), luxury vehicles or sports cars will leave you with a pricey premium. In contrast, cheaper models will make your car insurance budget more manageable.
Car insurance providers typically offer three policies: 1) third-party (the most basic and affordable liability protection), 2) third-party fire and theft (basic and affordable, with a fiery and theft-protective twist) and 3) comprehensive cover (all-encompassing protection).
Excess has a seesaw-like relationship with premium; when one goes up, the other comes down. The higher your excess, the lower your premium and vice versa.
*Please note: always make sure you can afford the excess should you be in an accident. While it's all good and well to shave off R200 or R300 per month, if your excess is at R15k per month and you can't afford that, then what?
- Your age and demographics
Young drivers, aged 25 and below, typically get slapped with a high insurance premium because they’ve yet to prove their spilion (slang for ‘experience’—trying to appeal to the kids, don’t judge!) on the road.
Additionally, male drivers pay more premiums for car insurance than their female counterparts. It has something to do with reckless driving, which is more prevalent in men than women.
- Location
Like in real estate, it’s all about location, location, location for insurers. The address where you park your car and how well-protected it is overnight also affect your monthly car insurance premiums.
Collisions and other perils are more likely if you live in a densely populated area with high crash and theft rates.
- Driving and insurance history
Multiple collision-related incidents or regular claims from your insurance will negatively affect your risk profile. This means you’ll end up paying more in premiums.
Alternatively, not having any previous insurance history, where you’re the policyholder, can also be detrimental because insurers don’t have a record of your behaviour.
Please note: The above is not a complete list. So, you might want to check with your insurer for a detailed breakdown of what makes up your premium price.
When Do Car Insurance Premiums Go Up And Why?
Car insurance premiums can increase for several reasons. Typically, this change occurs every six or twelve months.
Here are some examples of why car insurance premiums can increase:
- Inflation. Yep, even car insurance providers aren’t safe from the scourge of the rising cost of living.
- Policy renewal. This increase usually happens after assessing your previous year; if you filed multiple accident claims over a short period or were fined for speeding, you’ll have to pay the price.
The insurer can and will reassess your risk profile based on your behaviour and charge you a fair amount.
- Adding another driver to the policy. Including a secondary, tertiary or—wait, what comes next?—other drivers will bump up your premium as this exposes the insurer to more risk.
Tips to Reduce Car Insurance Premiums
There are several ways to lower your monthly car insurance bill; here are a few of our favourites:
- A higher excess. As previously mentioned, a higher excess will lower your car insurance premium. Granted, this is only relevant for some. You should always be able to afford your excess when an unexpected calamity strikes!
- Bundle insurance policies. Combining your car, household, and contents under one policy or having them with the same provider can give you favourable discounts on all the above. Or, you can insure multiple vehicles under a single policy, which could result in massive savings. (P.S. Pineapple is yet to offer household and home contents insurance, but watch this space!)
Also, if you're a daddy's little girl or mommy's little boy and have the means, you could always ride off your parents' risk profile and pay them back monthly.
But being over 25 and riding dirty with your parents is not cute, so get a quote for your own policy as well!
We’re pretty sure your frontal lobe can handle the responsibility.
- Choose a cheaper policy. Comprehensive insurance is the most expensive policy, and for good reason—it provides the most protection! However, if funds are tight, you can downgrade to a more affordable policy, such as third-party only. However, this exposes your vehicle more and may leave you financially vulnerable.
That being said, here’s a quick disclaimer: When it comes to buying insurance, you need to know what you need and what you’re buying.
How?
Do your homework, read up on an insurance provider’s reviews, and see what their clients have to say.
Sometimes, cheap is cheap for a reason!
Rather, opt for an affordable option, knowing that everything you require is met by the provider.
How Much is a Car Insurance Premium In 2024?
The question of how much car insurance will cost in 2024 is valid, but we can only answer it vaguely yet totally realistically.
Comprehensive car insurance premiums in South Africa cost between R333 to R2,500+ per month.
Fun fact, Pineapple has someone’s 2013 Daihatsu Sirion 1.3i insured for R83,95* (Not a typo). That’s more affordable than a movie ticket at a movie theatre we won’t name—not even including the popcorn and slushy.
And remember, all premiums are risk profile-dependent.
Your age, driving history, previous insurance record, and gender can all affect the amount of your specific policy fee.
Common Car Insurance Premium Myths Debunked
Much has been said and written about car insurance, but how much is true?
These five car insurance misconceptions are more common than you’d think.
And we at Pineapple will debunk every last one, and that’s the truth, Ruth (we know that’s not your name, but just go with it—it’s cute and rhymes)!
- Red and black cars cost more to insure.
There was a fierce debate around this topic in the office. So, we reached out to our underwriter (Old Mutual Alternative Risk Transfer Insure Limited. But you probably already knew that—it took up half of our radio adverts), and this is what they had to say about a car’s colour and how it affects insurance premiums:
“Yes, the colour of the vehicle does affect the premium due to the following reasons:
- Specific paint colours cost more (e.g., silver and white are standard/base colours and, from a cost perspective, will be "cheaper" than red or black).
- Metallic paint is generally more expensive to repair.
- Darker-coloured vehicles are less visible at night than white or light-coloured vehicles, which increases the risk of accidents and would, therefore, impact the premium.”
However, they did add that the effect was almost negligible. So, don’t rush to paint your car any other colour because Pineapple said so.
- Car insurance premiums decrease after you turn 25.
The older you are and the more driving experience you have, the more likely you will receive low premiums. But, this is not so much a matter of age—at least not yours, anyway—it’s all about how long you’ve had your licence. However, if your driving experience is plagued with frequent accidents, claims, and traffic violations, your premiums will reflect your risky behaviour.
- Driving an older car means my insurance will cost less.
Driving an older vehicle model may result in lower premiums. However, the vehicle’s age is just one factor in your risk profile. There are still other things to consider, like the car’s make, the driver’s age, their insurance history, and the frequency with which they use the car.
- The best car insurance coverage in South Africa is expensive.
We don’t know what metrics you use to measure the best car insurance in South Africa.
But here at Pineapple, we typically consider the top-rated insurance, according to Google reviews, to be a pretty telling factor.
So, if we take it to mean that Pineapple has the best car insurance in the country, you’d be incorrect in saying the coverage is pricey. At a starting price of just R25-ish a day, our comprehensive coverage is anything but expensive.
That low price includes useful benefits like emergency assistance, key replacement, windscreen and window repair, and credit shortfall cover.
- Car insurance follows the driver.
Unlike the spooky entity from the cult classic movie It Follows, car insurance does not follow the driver. Instead, car insurance follows the car.
So, if you decide to lend your car to your bestie, boyfriend, or any other loved one, know that it’ll affect your policy should they get into an accident.
Conclusion
Understanding your premium calculation will keep you from fighting with your insurance provider over unfair prices.
Contrary to popular belief, insurers don’t enjoy charging exorbitant fees for car insurance.
Knowing and understanding your insurance premiums means you can make informed decisions to reduce costs. Maintaining a clean driving record or choosing the right coverage policy are valuable ways to secure an affordable monthly car insurance premium.
Alternatively, you can compare quotes for the best insurance deal.
But why would you need to look any further than Pineapple? Our daily premiums cost less than a single Gautrain ride.
Plus, we offer benefits to make every drive a breeze: Picture free 24-hour flat battery and tyre assistance, no fuel breakdown, windscreen and window repair, and lost key assistance.
Click here for an obligation-free quote. It’s just 90 seconds.
That’s less time than cooking a packet of instant noodles!
Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.
Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply.
Team Pineapple
Team Pineapple comprises our company’s top talents, who are dedicated to creating clear, high-quality content on essential vehicle insurance topics. This diverse group, including actuaries, accountants, data scientists, and insurance professionals across South Africa, collaborates to produce enlightening and empowering articles.
Each piece is thoroughly researched, factually accurate, and rigorously reviewed to ensure quality.
*We say they’re the finest because we want them to keep writing for us!
