A straightforward guide on the different types of car insurance you can buy.
Understanding car insurance
Car insurance is a form of financial protection from bad things that can happen when owning a car, such as damage to or theft of your car, or being held financially responsible for damages to another person’s property.
If you don’t have huge amounts of money in the bank, then driving a car without car insurance can be risky. Since cars are usually one of the most expensive things that you will own, the possible damage after an accident can leave you with a lot of bills that you might not have budgeted for.
Available car insurance options
Insurers generally offer several car insurance options, allowing you to choose the level of protection you think is necessary. The most common types of car insurance you can buy are:
1. Third-party liability:
Third-party liability is the most basic and affordable car insurance you can buy. It covers damages your car might cause to other people’s cars or property but excludes any damages to your own car. Its primary purpose is to cover you when a third party holds you responsible for damages caused by your car.
2. Third-party, fire and theft:
This is an extension of the basic third-party liability by covering your car against theft and fire-related damages.
3. Comprehensive car insurance:
This is an all-in-one cover option and the highest level of cover that you can get for your car. It covers your car for theft, hijacking, accidental and malicious damage, damage caused by Mother Nature, plus any damage you cause to someone else’s property with your car.
Additional benefits that come with comprehensive cover
Under comprehensive car insurance, some insurers also include additional benefits like:
- Replacement of lost or damaged keys and remote controls.
- Reimbursement for emergency repairs (as long as the reason for the repair is listed in your policy and you provide a legitimate receipt).
- Coverage for towing, transport, and storage.
- Repair or replacement of damaged windscreens and windows.
- 24/7 emergency roadside assistance.
Optional benefits you can add to your comprehensive policy
- Car hire.
- Credit shortfall.
- Extras: extra cover for things like bull/tow bars, additional lights, fancy sound systems you’ve installed, or new shiny rims for your wheels.
- Tyre protection
Types of car insurance offered by Naked
1. Damage to Others: Equivalent to third-party liability, this covers legal liabilities if your car damages another's property.
2. Stationary Cover: Unlike the traditional "third party with fire and theft", Naked offers Stationary Cover. It protects your car from damage while it's not being used and securely parked. Stationary Cover includes protection against accidental damage from natural events, objects falling on your car, malicious damage, or damage from someone reversing into your parked car.
3. Naked’s Comprehensive Cover: Naked’s comprehensive cover covers you for the loss or damage to the car itself, as well as for third-party liability. You can also choose the Car hire, Credit shortfall, and/or Extras optional benefits we have on the app. Additionally, we cover you for things like loss of keys and remote controls, emergency repair for when you’re stuck on the road, transport, towing, and storage as well as cover for when your windscreen and glass on your car chips or shatters.
At Naked, third party liability cover is known as Damage to Others. This covers your legal liability if your car causes damage to another’s property – the same as third-party liability.
Stationary Cover
At Naked, we don't offer a product called "third party with fire and theft". Instead, we offer Stationary Cover. It covers you if something happens to your car while you are not using it and while it is stored in a secure place, such as a locked garage or security-controlled parking area. Things like accidental damage caused by Mother Nature or something falling on your car, malicious damage, or damage that occurs from someone reversing into you while your car is parked are all covered by Stationary Cover.
Naked’s comprehensive cover
Naked’s comprehensive cover covers you for the loss or damage to the car itself, as well as for third-party liability. You can also choose the Car hire, Credit shortfall, and/or Extras optional benefits we have on the app. Additionally, we cover you for things like loss of keys and remote controls, emergency repair for when you’re stuck on the road, transport, towing, and storage as well as cover for when your windscreen and glass on your car chips or shatters.
At Naked we understand that some people don’t use their cars daily. You might work from home, have a family car that gets used regularly and another that sits in the garage, or you might have a fancy sports car that only gets taken out on Sundays. To accommodate this, we offer a feature on our app which allows you to pause your cover when not driving. You can switch from comprehensive to stationary cover with the touch of a button, ensuring protection against the respective risks.
Matching car insurance to your needs
Here are several real-world examples to illustrate how you can tailor your car insurance to your specific needs:
- Emily, who frequently drives, is aware of the unpredictability of accidents. If something happened to her car, or if she damaged someone else’s car and they sued her, it would leave her financially strapped. Emily wants her insurer to help her out should she cause damage to others while in her car. For these reasons, Emily opted for comprehensive car insurance.
- Sam can cover the costs of his own car being damaged or stolen. But he’s more worried about bumping into a fancy car and having to pay for those damages. This is why he chose the "damage to others" option.
- Yanga prefers to use her bike to get around but still owns a car that she does not drive often. Yanga knows that her car is still at risk of being stolen or damaged while in storage and therefore went for the stationary cover for her seldom-used car.
- Tshimollo recently bought a shiny new SUV, which he financed. The finance provider required him to have comprehensive coverage, so that’s what he got.
- Lebo works from home, meaning his car spends the week parked securely in the garage. Thus, he uses Naked's CoverPause feature, toggling between comprehensive and stationary covers.
Take the next step
Now that you're well-informed, and know what to look out for, why not get a car insurance quote from Naked? It only takes 90 seconds!
