You can now buy accident-only car insurance for one day at a time – but you have to install hardware

Business Insider SA
The snitch box.
(A still from's overview video, with the data unit highlighted.)
  • Startup sells car insurance one day at time – just like prepaid airtime, it says.
  • And, like airtime, you can buy what you can afford; no need to pay according to the value of your car.
  • You can even pay at some ATMs.
  • But you'll need a data logger device installed in your car first, so getting immediate insurance requires planning ahead.
  • Add the hardware to the price, and it is not at all cheap compared to regular, month-to-month car insurance.
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What it sells is a little like prepaid airtime, says South African insurtech company But the reality is a little more complicated.

Vaai offers car insurance cover for 24 hours at a time. That is not unheard of in other countries, where some insurers will even cover you by the hour. But that is typically sold as as stop-gap measure for specific circumstances, such as cross-border visits, or needing to move a newly-bought car home.

In South Africa though, Vaai is pushing its offer on the basis of buying what you can afford, "because having some cover is better than nothing", or "for those times you think a specific driving occasion is riskier".

To buy cover from the startup, you punch a couple of details into its app, including VIN number, a photo of the car and licence disc, and the rand amount of insurance you want, and select what time of day you want cover to start. Your claims history does not count, and you can pay your premium in cash at an FNB ATM if you can't do so via the app.

At the bottom end of its scale R40 can buy you R13,000 worth of insurance, Vaai says. It covers a maximum of R120,000 worth of damage.

First, though, you need a data logger that plugs into your engine system. That will set you back R350, and currently it is available only for delivery in Gauteng.

In order to activate insurance, your smartphone must be connected to the data logger via Bluetooth, and your phone must be connected to the internet. The device will not use the internet connection while you are driving, Vaai says – but you will only be covered for an accident if the data logger is connected to your phone at the time, according to its policy wording.

If your policy is fully paid, your tyres have enough tread, and the driver isn't drunk, among other standard insurance requirements, you will be covered – for accidents. The insurance does not include third-party damage, theft, hail damage, floods, or tyre-bursting potholes.

If you drive once a month and want only R13,000 worth of insurance on that basis, you'll pay around R70 per day at the bottom end, factoring in the cost of hardware. 

If you were to use Vaai every day, recreating standard insurance – which it says you definitely should not do, you would pay a little under R15,000 for the year – or 15% more than the maximum amount insured.

On the other hand, you will pay no excess in the case of an accident, says Vaai.

(Compiled by Phillip de Wet)

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