Car-accident cover on demand is now available in South Africa.

Vaai.co compares its product to cell phone airtime – “you buy the cover you can afford only when you need it, and recharge when you need to do so”.

“Insurance companies actually penalise you if you live in a poorer area and drive a cheaper car – they charge less to insure fancy cars in fancy areas,” says Vaai.co co-founder Thabang Butelezi.

“It just makes no sense to me that those South Africans who need better prices are quoted more. 

“Plus, most of us hardly drive our cars during Covid-19. 

“Vaai.co developed the answer for those who can’t afford ongoing car insurance and those that have had enough of the great car insurance rip-off.

“Instead of paying for car insurance monthly via debit order for the rest of your life, you download the free Vaai.co app from the Google Play store and buy prepaid insurance for 24 hours,” explains Butelezi.

“You are totally in control and can adjust cover to suit your budget, because having some cover is better than nothing. 

“For instance, for less than the price of two two-litre cold drinks you get R13 000 cover. If you have more money available, you can buy up to R120 000 worth of cover.”

Butelezi does, however, note that Vaai.co is not a replacement for traditional car insurance.

“It offers affordable basic cover per day when you need it, but the cover is only for accidents. 

“Vaai.co is for those times you think a specific driving occasion is riskier.”

Vaai.co offers its insurance product with zero excess.

“We also don’t care about your claims history,” adds co-founder Duncan Barker.

“We keep things very simple. You select the amount of cover you need for the next 24 hours based on what you can afford.”

Payment is made on the app, with cash payments also accepted at FNB ATMs.

To buy the insurance product, prospective clients will need to purchase a once-off data logger for R350.

The data logger runs diagnostics on the vehicle. It also allows Vaai.co to detect if the driver had a major accident and to dispatch a towing service to the scene.

South African road users can also use the Vaai.co app for on-demand roadside assistance. 

Vaai.co took part in the AlphaCode Incubate programme, which is a R10-million Fintech startup support initiative. 

“Vaai.co is right on trend with its insurance-on-demand concept,” says Dominique Collett, a senior investment executive at Rand Merchant Investments and the head of AlphaCode.

“We believe that there’s a tremendous need for innovation in the insurance space, particularly during Covid-19 when finances are stretched to the max and existing models are no longer affordable. 

“Vaai.co has developed a compelling solution for South Africans who want cover, but can’t afford traditional insurance.”

Vaai.co is underwritten by Compass Insurance. It is currently only available in Gauteng, with plans to expand nationally.