Major headache for South Africans with car insurance

 ·26 Mar 2023

Rampant vehicle theft of high-value vehicles in South Africa is pushing up car insurance premiums – so much so that insurers are suggesting ways of disabling keyless entry and compulsory trackers.

Speaking to Business Times following the release of the company’s financial results for the six months ended December, Outsurance CEO Marthinus Visser said he was concerned about the impact of crime on insurance claims.

“We are seeing more high-value vehicles and 4X4s being stolen, mostly those with keyless entry. That obviously increases the cost of insuring those vehicles significantly,” said Visser.

According to the latest crime figures in February 2023, 23,025 carjackings were reported by the end of 2022, representing an average of 63 vehicles per day.

Provincially, Gauteng, KwaZulu Natal (KZN), and the Western Cape experienced the most incidences of hijackings.

Fidelity services group CEO Wahl Bartmann also noted the prevalence of high-value vehicles and 4X4s being stolen. The group said Toyota models remain the most targeted cars in South Africa, accounting for 31.6% of the group’s incidences.

Bartmann added that Toyota is followed by Volkswagen (VW) – accounting for 14.1% – and Ford, representing 10.4% of the group’s incidences.

According to Fidelity ADT, the following heigh-value 4X4s models are at high risk of being stolen:

  • Toyota Prado
  • Toyota Landcruisers
  • Toyota Hilux
  • Ford ranger
  • Toyota Fortuner
  • Nissan NP200

The surge in the theft of these types of vehicles has had a material impact on Outsurance’s premiums, with the insurer noting that gross written premiums grew by 8.7%.

It is well known that keyless entry models are now being targeted by vehicle theft syndicates, and it has gotten to a point where insurers are looking for solutions to mitigate the rising premiums for such cars.

“Measures are being looked at, things like tracking devices and even disabling the keyless entry for those vehicles equipped with such a feature that you can disable it,” Visser said.

He added that the company was encouraging all customers to keep their vehicle’s keys in Faraday pouches — which block signals — after locking their vehicles to prevent criminals from intercepting the vehicle’s key.

“The theft of keyless entry cars is significant, so it is important for us to work with interested parties to try to mitigate those losses and try to keep premiums more affordable,” he said.

Many South African insurers – including Old Mutual – are now suggesting it be compulsory for motorists to install tracking devices or risk losing their insurance coverage.

As a result, Old Mutual Insure and Elite Risk Acceptances now require the fitment of approved early warning/active tracking devices on higher-risk vehicles covered under Commercial Lines, Agri and Personal Lines policies.

Vehicle owners are urged to ensure the fitment of good-quality tracking devices before 15 April 2023.

The provinces that are affected:

  • Gauteng
  • KwaZulu Natal
  • Limpopo
  • Free State
  • Mpumalanga
  • North-West

This does not apply to vehicles in the following areas:

  • Western Cape
  • Eastern Cape
  • Northern Cape
  • Botswana
  • Namibia

“Although it seems like traditional tracking devices are becoming less effective, they still assist in mitigating the risk as they do provide an advantage in the early stages of theft and hijacking,” the group said.

The companies warned that if policyholders do not comply, they will no longer be insured against theft and hijacking.

“We are living in unprecedented times where vehicle syndicates have learnt how to use sophisticated means of technology to access a vehicle. We remain committed to the safety and security of our customers. It would be amiss of us not to take drastic action in this climate,” it said.

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