There are over 12 million cars on the road in South Africa.  Only 70% are insured.  Should third-party car insurance be made compulsory in the future?

What exactly is third-party insurance?  It is cover that you buy to pay for repairs to a third party’s vehicle that was damaged in an accident caused by you.  In essence, you and the insurer are the first two parties.  The person that was involved in the accident, represents the third party.

During the Budget speech,  Finance Minister Tito Mboweni announced plans to implement compulsory third-party car insurance.  The main reason being, to relieve the heavily indebted RAF (Road Accident Fund).

Here are four reasons why it might not be such a bad thing:

It will protect you

If you are not insured and crash into someone’s car, and you are at fault, you will be liable to pay for the damages.  That can amount to thousands of Rands, if not more.  Even if the other driver is insured, his/her insurance company can seek to recover damages from you.  If you are uninsured, they have the right to sue you in your personal capacity.

“In many countries, it is a legal requirement for every vehicle on the road to be insured and so too, it should be in South Africa”, says Ernest North, the co-founder of Naked Insurance.

It is the way forward

In countries like Australia, Germany, Hong Kong, Ireland, the United Kingdom, New Zealand, Spain, and the United States (to name but a few), third-party insurance is compulsory.  In South Africa, a percentage of every Rand spent on fuel, goes to the RAF, to compensate for victims of road accidents.  However, the RAF does not cover damages to vehicles involved in the accident.  Third-party insurance appeal to people that don’t want cover for their own car because the value of the vehicle is just too low, it just wouldn’t be worthwhile.

It can be affordable

According to North, people typically tend to buy comprehensive insurance or none at all.  However,  third-party insurance costs about 80% less than comprehensive insurance, while third-party with fire and theft insurance cost about 60% less than comprehensive cover.  Making it an affordable choice from as little as R167 per month, depending on your risk profile.

We all benefit

For those who don’t have any vehicle insurance, third-party insurance would be an additional cost.  But it would save them a lot of money in the event of an accident.  If more people can afford to get better workmanship repairing their cars following an accident, in turn, would result in better roadworthiness amongst cars on the road.  That would also lead to a safer driving environment, and ultimately lower risk and lower premiums for those insured.

Compulsory third-party insurance would be good for everyone, but it’s still a long way to being implemented.  Government hasn’t even started debating this topic yet.  When they do, there will be a lot of issues to overcome.   But until then, we as motorists should take out proper insurance, even if it’s only third-party insurance.





Arde, A. (2020, March 5). Third-party car insurance will benefit all.  Insurers welcome plan to make cover compulsory.  Retrieved from

Money Marketing. (2020, March 1). Compulsory third party cover would be welcomed – but challenges await.  Retrieved from