Why third-party insurance can make all the difference

Covering the cost of damage or a complete vehicle write-off can be financially taxing.

Covering the cost of damage or a complete vehicle write-off can be financially taxing.

Published May 16, 2024


According to the Road Traffic Management Corporation, there are as many as 800 000 road accidents in South Africa every year. Despite this staggering statistic, the South African Insurance Association reports that as much as 65% of South African motorists are not insured.

Covering the cost of damage or a complete vehicle write-off can be financially taxing, especially when the costs are compounded by the damage caused to another party’s vehicle. At the very least, third-party car insurance can alleviate some of this financial burden.

Siyakha Masiye Spokesperson at MiWay Insurance says that South Africans have been impacted so negatively by the cost of car accidents that the government considered making third-party insurance compulsory in 2020[3]. Several other countries including Australia, Germany and the UK have already implemented this measure to prevent motorists from being forced to pay for unfortunate road incidents out-of-pocket.

While having third-party insurance is not yet compulsory in South Africa, the reality is that due to a tough economic climate, the average motorist simply cannot afford to cover the cost of causing an accident. “South Africans need a financial safety net that can protect them from the legal liability that could arise if they are found to be responsible for causing damage to someone’s else’s vehicle.

Although third-party insurance doesn’t provide the same level of cover as a comprehensive car insurance policy, it does offer a great level of value and is the most cost-effective option,” says Masiye.

How third-party insurance works

If a motorist causes an accident, they, as the policyholder, are referred to as the first party. The second party is the insurer, and the person suffering the loss or damage due to the accident is classified as the third party.

Liability in a third-party car accident is determined based on several factors, including the rules of the road and evidence gathered at the scene of the accident. The process can involve a police investigation along with witness statements.

Although the terms differ depending on the insurer, third-party insurance will typically cover motorists for loss or damage caused to a third-party’s vehicle or property in the event of an accident. Claims of this nature could include items that are in the vehicle at the time of the collision, such as cellphones, GPS equipment and laptops.

For those who do have third-party insurance, the claims process can be streamlined by remembering these three important steps when an accident occurs.

Record important details

At the scene of an accident, and after following the relevant safety protocols, motorists need to obtain the personal details and vehicle details of the third-party.

Details to note include the third-party’s full name and identity number, their contact number, and the details of their insurance company. It’s also useful to record the make and model of the car, the colour of the car and its registration number.

Take photographic evidence

As Masiye explains: "Another useful tip to remember is to take photographs of the accident scene (if possible) and the damage caused to all vehicles involved.

This step is often overlooked by those who are responsible for accidents. While it may seem unnecessary or something best left to the affected party, it is equally important for the responsible party to document the collision. This documentation can prevent fraudulent claims if the third-party attempts to exaggerate the damage or alter details of the incident.”

Report the incident to the police

All parties involved in an accident need to report the incident at the nearest police station. In most cases, the police would require both parties to complete an accident report, which will outline any details that pertain to the collision, including a description of the extent of the damage, whether any portable possessions were damaged and if any bodily harm occurred.

This step is vital, even if neither party intends to take legal action. Police reports on accidents need to be compiled no less than 24 hours after the collision occurred. In the event of a claim, the insured and third-party will be required to submit the relevant case number before the claim can be processed. Having this information on hand can therefore save both parties valuable time and streamline the payout process.

“Keeping safe on the roads is often the intention but life can get in the way and accidents do happen. By having third-party insurance in place, motorists can travel with some peace of mind that they have financial protection,” Masiye said.