The consequences of a car accident can be financially devastating for victims, particularly when the motorist faces exorbitant repairs or replacement costs. This can place an undue financial burden on owners and families who rely on their vehicles for livelihoods and daily errands.
A staggering 45% of the clients surveyed by a global consulting firm, Deloitte, indicated that they were considering cancelling their motor insurance, while 17% said they were already driving without insurance. The increasing cost of insurance is detrimentally affecting consumer sentiment and behaviour.
According to the South African Insurance Association (SAIA), about 65% of South African motorists drive without insurance. This means there is a 65% chance that a motorist would get involved in an accident with an uninsured vehicle. Third-party insurance was compulsory in terms of South African legislation from 1942 until 1997, before it was replaced with the Road Accident Fund (RAF) which only provides minimal financial relief for death and bodily injuries sustained in road accidents.
With escalating cost of medical healthcare cover, accessing specialised medical treatment is a challenge for those who can sustain serious injuries from car accidents. The bulk of the cost following on an accident it ends up being paid by the injured person or their medical aid. The introduction of gap cover as a financial solution to medical scheme shortfalls for specialist consultations, ensures clients have access to the necessary medical care and treatment without facing significant out-of-pocket expenses. However, the clients must consult with their brokers who can assess their medical needs and look at what gap cover is relevant to them.
Last year the Zimbabwean government proposed to broaden the scope of third-party insurance coverage under the Third-Party Motor Vehicle Scheme to include medical benefits; rehabilitation; injury grants; funeral grants and loss of income. The new law makes a provision for every vehicle on the road to have insurance.
Many countries around the world have already implemented mandatory third-party motor insurance. For example, the United Kingdom and other African countries such as Morocco, Kenya, Nigeria and Egypt. The United States established mandatory minimum auto insurance coverage requirements – known as “compulsory financial responsibility laws” in Massachusetts in 1927. Therefore, all motorists are legally obligated to buy compulsory insurance.
What happens if motorists don’t have third-party cover
Mandatory third-party insurance has proven to be an effective measure in protecting victims of road accidents and ensuring financial accountability for all road users. Reinstating mandatory third-party motor insurance is crucial in South Africa, given the high prevalence of road accidents on our roads.
This would ensure that all drivers are held accountable for their driving behaviour on the road. When motorists know that they are financially liable for any accidents they cause, they are more likely to change their driving behaviour and adhere to all traffic rules. This can lead to a reduction in reckless driving as well as creating a safer environment for all road users.
If the uninsured vehicle on the road causes an accident that damages your car does not mean that insurers do not pay for the repairs or replacement. But it means that if the insured driver is not at fault, there is little chance of a recovery against the guilty driver. Another way to get a third-party fault driver to compensate is to hire a lawyer and sue them. However, often the driver of the uninsured vehicle does not have money to pay for the damage that they have caused.
Safety awareness on the roads
According to the Road Traffic Management Corporation, State of Road Safety in South Africa, January 2023 to December 2023 report, 10,180 people died on the road in the country, with 1,427 fatal accidents happening over the festive season.
Holiday periods often see a surge in road accidents due to various factors such as increased traffic volumes, alcohol consumption, fatigue, and adverse weather conditions. Studies have shown that several factors contribute to road accidents, including human error, poor road infrastructure, unroadworthy vehicles, and environmental and weather conditions. Human factors, such as speeding, reckless driving, distracted driving and driving under the influence of alcohol or drugs, are among the primary causes of accidents in South Africa. Additionally, fatigue and lack of sleep impair driver judgment and reaction times, increasing the likelihood of accidents.
After the recent snow event in September that wreaked havoc on roads between Free State, KwaZulu-Natal and Eastern Cape, motorists must follow the weather forecast for warnings or alerts and be cautious when traveling this festive season.
We also encourage clients to review their policies, including their medical and gap covers before going on holiday to familiarise themselves with the terms and conditions of the policies. Clients need to check their policies to ensure they have the correct cover in place and update their details and inform their brokers or insurers of any changes in their circumstances that may have occurred since they have taken out the policy.
Written by Sharon Paterson, CEO of Infiniti Insurance Limited