The Role of Car Insurance in Protecting Against Liability

Navigating South African roads can sometimes feel like an obstacle course. Between unpredictable weather and less-than-ideal road conditions, you also need to contend with the behaviour of other drivers. The risk of a car accident is always present, and with it comes the burden of unexpected costs.

Car insurance is designed to shield you against the financial implications of your car's loss or accidental damage. At Budget Insurance, we also want you to understand the role of insurance in protecting against liability claims by third parties. This protection is found in most car insurance plans. Discover more about liability insurance.  

Common liability risks faced by drivers

You are exposed to many risks every time you get behind the wheel. These risks range from factors you control to those beyond your influence. Some of these include:

• Lack of experience. New drivers often lack the experience needed to anticipate and respond to road hazards, increasing their risk of having an accident.

• Weather conditions. Heavy rain, hail, mist and even the sun's angle can all reduce visibility while driving. Wet roads can also make it more difficult to control your vehicle.

• The state of the road. Potholes, debris or unmarked speed bumps all present a significant risk even when you are familiar with the road.

• Speeding. No matter how highly you rate your driving skills, speeding increases the risk of an accident. High speeds reduce your control over a vehicle and significantly increase the braking distance.

• Distracted driving. Texting while driving increases the risk of an accident[1], but it isn't the only form of distracted driving that contributes to road accidents. Eating, adjusting the radio or GPS, applying make-up, and searching for items in the car while driving all take your focus off the road.

These risk factors contribute to road accidents and damage to property. If you are at fault and cause damage to someone else's vehicle or property, you could be held responsible for the associated costs through a liability claim.

What is liability car insurance?

You're driving home in the rain, and as you navigate a familiar bend, you're met with a pile of building rubble right in your path. You swerve to avoid it, but – because of the rain – your car leaves the road and crashes into a neighbour's garden wall. You're at fault, so your neighbour's insurer will hold you liable for the cost of rebuilding the wall.

Many accidents result in damage to another person's property, such as their vehicle, personal belongings in the vehicle, or their home or business. The purpose of liability car insurance is to safeguard you against claims for this damage where you are found to be at fault. It’s similar to how public liability insurance protects businesses against claims for injury or loss caused by business operations or activities.

In South Africa, liability is included in most car insurance plans, including Comprehensive, Third–Party Fire and Theft and Third-Party only cover. However, the extent of your liability cover will depend on your personal policy.  

• Comprehensive Car Insurance offers the broadest cover. It includes cover for theft, hijacking, loss and accidental damage to your own vehicle as well as any third-party damage you cause.

• Third-Party, Fire & Theft Car Insurance is a mid-tier insurance product. It includes third-party damage – or liability car cover – and cover for damages to your car caused by fire. Other accidental damages are not included; however, loss or damage through theft is included.

• Third-Party Only Car Insurance is a basic insurance product that only offers liability car insurance or third-party damage cover. Damage to your own car is not covered.

The limit for third-party liabilities can vary across different insurance plans, so always consider this fact, along with your specific circumstances, before choosing an insurance plan.

Third-party liabilities covered by car insurance

Think of public liability as the cornerstone of your car insurance policy. It limits your personal liability if you're responsible for a car accident that damages another person's vehicle or property. However, it’s important that you know precisely what it does and doesn't cover.

Third-party damage is covered up to your policy's limit. This refers to the damage inflicted on another person's property and isn't limited to their vehicle or personal belongings. It includes damage to buildings, fences, walls and other structures. If you are found to be at fault, your insurance will cover the cost of repairing this damage up to your policy's limit.

Bodily injury that follows a car accident is not covered. Injury-related claims are managed by the Road Accident Fund2 in South Africa. However, any damages awarded against you in a legal case might be covered.

There are other situations where your insurance will not provide liability cover. Some of these include the following:

• Unauthorised drivers. If someone is driving your car without your permission and causes an accident, your insurance will not cover the cost of damages to a third party’s property.

• Invalid driver's licence. Car insurers could deny a third-party insurance claim if you or the authorised person driving your car at the time of the accident don’t have a valid driver's licence.

• Driving under the influence. Suppose the driver is under the influence of alcohol or drugs when the accident occurs. In that case, the car liability insurance will not pay out, meaning the driver would be personally responsible for the costs.

• Illegal activity. Your car insurers will also not settle claims if your car was being used for illegal activities at the time of the accident. This could be anything from street racing to committing a crime.

Exclusions, limitations, and situations where your liability insurance will not apply are covered in your policy documents. However, if you have any doubts or queries, you can also speak to a trained Budget Insurance consultant to avoid unwanted surprises when it's time to make a claim.

Get a car insurance quote from Budget Insurance

The best way to protect yourself from potential third-party liabilities following a car accident is with insurance. Third-Party, Fire & Theft, and Third-Party Only are good budget options, while Comprehensive Car Insurance covers both your own car and any third-party damage. Request an online car insurance quote and get the protection you need.  

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Sources:

[1] News24: Distracted driving a leading cause of accidents in SA

[2] RAF: Products and services 

Disclaimer: The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.