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From the “Bee in my Bonnet” column; Always learn from clever people

WHY is it that there is no third party compulsory vehicle insurance in South Africa?

With the collapse of the Road Accident Fund (RAF) – currently in hock to the tune of over R40bn and rising, why haven’t the insurance industry pushed for mandatory third party insurance? It should be additional business for them, and a blessing for the citizens of the country, so why not?

We have the most ridiculous state of affairs in South Africa. Anyone, and I mean anyone, can purchase, borrow or steal a motor vehicle and use it on the open road cheek by jowl with other road users, WITHOUT having any form of insurance what so ever. This is only demanded when a vehicle is financed through a bank or vehicle finance company, but according to SAIA (South African Insurance Association), only 35% of vehicles on our roads have any insurance.

Furthermore, as mandatory roadworthy examinations are only required when a vehicle legally changes hands, there’s every chance that you will be in a collision with a un-road worthy vehicle, driven by an un-licenced driver who has no insurance. A great situation that nobody in authority is doing anything about.

When one considers that, according to statistics, more than 50% of ‘drivers’ of motor vehicles have never undergone a competence test and bought their licences from corrupt officials, it’s no wonder that the country’s accident rate and death rates are so high.

Apart from the human tragedy, the cost to the country is probably incalculable and includes medical and administrative costs, time away from work (if you have a job – which for 35% of the working population this doesn’t matter), police and public administration time and of course, the RAF which doesn’t work anyway and now takes years, if you’re lucky, to settle a claim.

Should you as a dutiful citizen with a legal drivers licence and comprehensive insurance be involved in a motor accident with an un-insured individual, then while your insurance may pay for your damage and medical costs, it will ultimately reflect upon your insurance premium by losing your no-claim bonus and having to pay an excess portion of your claim or both.

While it seems that South African motor insurance companies don’t work on a no-blame model for the benefit of their customers, they will try to recover their liability from the other party, providing that they are similarly insured. If not then, its hard luck to them. And hard luck to you as your insurance company, should they recover the cost of your accident from the other party, are not obliged to reinstate your no-claim bonus. And will probably increase your risk profile and that means a higher premium. But someone has to pay, hey?

To add insult to injury, we all pay to the dysfunctional RAF every time we fill up with petrol or diesel, to the tune of 10% of the fuel price, which nets the RAF some R45 billion annually. According to OUTA, these lucrative revenues are largely wasted due to inefficient administration (surprise, surprise), corruption and unscrupulous legal claims.

So what’s stopping the introduction of mandatory 3rd party insurance, yearly roadworthy testing and comprehensive and properly conducted driving tests?

Nothing I suggest, except that it will probably put cronies and thieves out of work and result in a loss of votes for the ruling party at the polls.


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