Car insurance · Pricing
How car insurance premiums are calculated in South Africa: the rating factors that move your price
Your premium is an insurer’s estimate of how likely you are to claim and what a claim would cost. Here’s what goes into that estimate, which parts you control, and what the rules say about how your price can change.
How car insurance is calculated in South Africa
A car insurance premium is the insurer’s estimate of two things: how likely you are to claim, and how much those claims are likely to cost. Everything an insurer asks you on a quote feeds one of those two estimates. A driver who is statistically more likely to have an accident, or a car that is expensive to repair or a frequent theft target, pushes the estimate up.
The rules also set limits on how that price is built. Under the Policyholder Protection Rules (Rule 6.1), a premium, and the share of each loss you carry through excesses, must “reasonably balance the interests of the insurer and the reasonable benefit expectations” of policyholders, and be based on realistic assumptions. In other words, insurers can charge for risk, but the price and the excess have to make sense together.
The useful question for you is which inputs carry the most weight, and which of them you can change.
The factors that affect your car insurance premium
Insurers consider the driver, the car, where it’s kept and how it’s used, plus the cover choices you make. A 2026 IOL report summed up the driver-side factors as age, driving experience, claims history, how long a person has been insured, where the car is used and parked, and credit record (IOL, April 2026). The table groups the common inputs. Not every insurer uses every one, and none publishes exactly how much each is worth.
| Factor | What the insurer asks about | Can you influence it? |
|---|---|---|
| The drivers | Age, years licensed, who drives the car most (the regular driver) and anyone else who uses it | Not your age, but you control whether the details are accurate and complete |
| Claims and insurance history | Recent claims, and how long you’ve been continuously insured | Over time. Claims history is one of the clearest signals of future risk |
| Credit record | Some insurers consider it as part of the risk profile | Over time. Ask whether the insurer you’re quoting with uses it |
| The car | Make, model, year, value and modifications | When you buy a car, not after |
| Where it’s kept | Your address and where the car is parked overnight and during the day | Sometimes, for example a garage or secure parking |
| How it’s used | Private use only, or also for business or work travel | Only by describing your actual use correctly |
| Your cover choices | The excess, the value basis and optional extras such as car hire or credit shortfall cover | Yes. These are the inputs you choose directly |
The last row matters most if you’re trying to manage cost, because those are choices rather than facts about you. A higher excess generally lowers the premium, and a lower excess raises it (Smart About Money, reviewed by the NFO’s Lead Ombud). Optional extras such as car hire or credit shortfall cover add to the cost. Our guide to retail, market and trade value explains how the value basis changes what a claim would pay.
Where the car spends its time deserves a closer look, because in South Africa that’s tied directly to crime.
Why where you park, and what you drive, matter so much
Theft and hijacking are a large part of motor risk in South Africa, which is why insurers ask where the car is kept and what security it has. Carjacking is falling but remains high. SAPS recorded 3,811 carjackings between April and June 2026, down 18.2% from 4,657 a year earlier (SAnews, August 2026). That is still roughly 42 a day.
Insurers may also set security conditions for some vehicles, such as an approved tracking device, and those conditions can affect a theft or hijacking claim if they aren’t met. Read the security section of your schedule as carefully as the premium.
Every factor above depends on one thing: the information you give the insurer being accurate.
Getting the details right matters more than the price
If information you give an insurer is wrong and it would have affected the insurer’s decision, the insurer may reject a claim or cancel the policy, even after years of premiums. The details that are easiest to get wrong are often the ones that move the price, such as who drives the car most and where it’s kept.
A case in the National Financial Ombud’s 2024 annual report shows what can happen. A policyholder listed himself as the regular driver. When the car was stolen, the insurer’s investigation found that the vehicle had been bought for his 21-year-old stepson, who drove it most. The insurer rejected the claim and voided the policy, arguing that the regular driver had been misrepresented to obtain a more favourable premium, and that it would not have accepted the risk at all with the stepson as the regular driver.
“In proving materiality, the participant essentially had to prove that a reasonable, prudent person would consider that the particular information should have been correctly disclosed to the insurer so that the insurer could form its own view as to the effect of such information on its assessment of the risk.”National Financial Ombud Scheme, Annual Report 2024, Case Study 1
The ombud upheld the insurer’s rejection of the claim and its voiding of the policy. The lesson isn’t that a young driver makes cover impossible. It’s that the insurer must be given the true picture so it can price it, and that a cheaper premium based on the wrong driver can leave you with no cover when you need it.
What’s inside your premium
A premium pays for expected claims, the insurer’s own costs, any intermediary commission and, where included, Sasria cover. You’re entitled to see the parts that go to third parties.
- Expected claims. The insurer’s estimate of what it will pay out for drivers and cars like yours.
- Broker commission, capped by law. On a motor policy, commission paid to an intermediary may not exceed 12.5% of the premium. On most other short-term policies the cap is 20% (Regulations under the Short-term Insurance Act, regulation 5.3(1)). The commission and who receives it must be disclosed to you (Policyholder Protection Rule 11.4.2(d)(ii)).
- Sasria cover. Ordinary policies typically exclude damage from riots, strikes, civil commotion, public disorder and terrorism. Sasria, the state-owned special-risk insurer, covers those risks through your insurer (Sasria). Its published rate for a private car is R26.23 a year, or R2.62 a month (Sasria rates schedule, effective 1 October 2025).
- Optional extras. Benefits you add, such as car hire after a claim or credit shortfall cover, each carry their own cost.
Knowing what’s inside the premium helps when it changes, which it usually does at least once a year.
Why your premium goes up, and the notice you’re owed
Insurers can change your premium, but they must tell you in writing, explain why, and give you at least 31 days’ notice before the change takes effect. These requirements come from the Policyholder Protection Rules:
Notice of any premium change, with reasons
The insurer must notify you in writing of any change to the premium and give “appropriate details of the reasons” for it (Rule 11.6.3). Unless you asked for the change yourself, that notice must reach you at least 31 days before the change takes effect (Rule 11.6.4).
A renewal letter you can compare
At least 31 days before renewal, the insurer must give you the renewal premium alongside the premium you last paid, explain any changes to the terms, and prompt you to consider whether the level of cover is still right for you (Rule 11.6.5).
Tip: put the renewal letter next to last year’s schedule and check the excesses and extras too, not just the premium.Insurance as a whole has been getting more expensive. Stats SA’s consumer price index for insurance rose 5.9% in the year to August 2026, while headline inflation was 4.2% (Stats SA CPI, August 2026). Stats SA doesn’t publish a separate figure for car insurance, so treat this as a broad signal rather than a measure of motor premiums.
A car losing value doesn’t guarantee a lower premium, because the value is only one input. If you don’t understand why your premium changed, ask for the reasons the rules entitle you to.
Review what’s driving your premium
Tick anything that has changed or that you’re unsure about. You’ll get a list of questions to take to your insurer or broker. This is a checklist for a conversation, not advice or a quote.
What to have ready for an accurate quote
A quote is only as accurate as the information behind it, and accurate information is what protects your claim later. Have these to hand:
When you compare quotes, compare the excesses, value basis, extras and exclusions as well as the premium. Our guide to comparing insurance policies sets out a method, and third-party vs comprehensive cover explains the main levels of cover.
Car insurance premium FAQs
General answers about how motor insurance is priced in South Africa. Your quote, schedule and policy wording decide your actual premium and cover.
How much is car insurance in South Africa?
There is no reliable single figure, because each insurer prices your driver profile, car, location and cover choices differently. The only accurate number is a quote based on your actual details. As a broad signal, Stats SA’s insurance price index rose 5.9% in the year to August 2026, ahead of 4.2% headline inflation.
What factors affect my car insurance premium?
Insurers commonly consider the drivers’ ages and experience, claims and insurance history, credit record with some insurers, the car’s make, model and value, where it’s used and parked, how it’s used, and your cover choices such as the excess and optional extras. Each insurer weighs these differently.
Why did my car insurance go up when my car lost value?
The car’s value is only one input. The premium also reflects the expected cost and frequency of claims for drivers and cars like yours. Under the Policyholder Protection Rules, your insurer must tell you in writing about any premium change, give reasons, and give you at least 31 days’ notice unless you asked for the change.
Does my credit record affect my car insurance premium?
It can. Some South African insurers consider credit record as part of the risk profile. Ask the insurer or your broker whether it’s used in your quote.
Does a higher excess make car insurance cheaper?
Generally, yes. Most insurers reduce the premium if you choose a higher excess, and charge more for a lower one. The trade-off is that you pay more yourself each time you claim, so it’s worth knowing exactly what you would pay on the day you claim.
What happens if I don’t list the person who drives my car most?
If the regular driver is misrepresented and that would have affected the insurer’s decision, the insurer may reject a claim and cancel the policy. In a case in the National Financial Ombud’s 2024 annual report, the ombud upheld an insurer’s rejection of a theft claim and its voiding of the policy because the owner’s stepson, not the owner, was the regular driver.
How much notice must my insurer give before increasing my premium?
At least 31 days before the change takes effect, in writing, with reasons (Policyholder Protection Rules 11.6.3 and 11.6.4). Before renewal, the insurer must also show you the new premium next to the one you last paid, at least 31 days in advance (Rule 11.6.5).
Should I insure my car for market value or retail value?
It depends on how much of a shortfall you could carry after a write-off. A higher insured value can cost more in premium, and the insurer still settles on the basis in your wording, up to the amount insured. Check which value your schedule shows and how the policy defines it.
Get a quote built on the right details
Questions about your premium or your cover? Contact Best Care for a quote. Cover remains subject to underwriting and the final policy documents.
This article is general education, not personal financial advice. Premiums, excesses and cover are set by each insurer and governed by the quote, policy schedule and wording. Statistics and rule references are as at the dates shown. Ombud cases are summarised for context and do not predict the outcome of any claim. Best Care Insurance Brokers CC, registration 1992/100995/23, Authorised FSP 8754. See the FAIS disclosure.