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Reintroducing third party insurance – Welcomed by most insurers

About 70% of the approximately 12 million cars on South Africa’s roads are not insured. Insurers have therefore welcomed the government’s proposal, announced in the recent Budget speech, to make third-party insurance compulsory for all vehicle owners in South Africa.

In a recent Business Day article insurance company Naked, an artificial intelligence-driven insurance provider, commented that compulsory third-party insurance would not only help to protect drivers from damages that are not their fault, but would also protect low-income drivers from severe financial consequences should they be deemed responsible for a collision.

Martin van Wyk, spokesperson for Budget Insurance, agrees. He explains that if a person is uninsured and crash into someone else’s car, and that person is at fault, he will be liable for the cost of the damage he or she caused. “That can amount to thousands, if not hundreds of thousands of rands. Even if the driver that you crashed into is insured, his or her insurance company will seek to recover damages from you. If you’re uninsured, they can sue you in your personal capacity,” van Wyk shares.

According to Outsurance, there is great value in having third-party insurance cover, and it should be a necessity for road users. “But … the majority of vehicle accidents do not involve an ‘at-fault’ who is uninsured; hence any saving would be reflective of that,” said Outsurance’s head of client relations, Natasha Kawulesar.

Insurer King Price also commented and said the minister’s proposal is aimed at reducing the pressure on the RAF. “We believe that if this is implemented effectively it can bring relief for the country and the huge spend on RAF administration and claims costs,” said King Price spokesperson Karli Stock.

It is great to see that something that worked, but was abolished many years ago is being reintroduced. It actually takes some of the pressure those whose taxes were used to fund the RAF. Being a natural realistic sceptic South African, one has to express the wish that this will serve the intended purpose, and not become another slush fund for looters of the state purse.

Click here to read the Business Day article.

Click here to read the Sowetan article.

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