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Why everyone else pays for uninsured drivers

And what you can do about it.
Image: Shutterstock

If you own a car and have insurance, then the problems caused by uninsured drivers in the form of accidents they can’t pay for – are being passed to you. According to a recent study, with South African roads being among the most dangerous globally, the likelihood of an accident occurring that you will have to fork out for as an insured driver is extremely high.

Accidents with uninsured drivers add to the financial burden of those who are responsible and do pay for car insurance.

Of the 12 million-odd cars on our roads, approximately only one third are insured. This means that you have an almost 70% chance that if you are in an accident, it will be with an uninsured driver. The high percentage of motorists without any form of motor insurance means that the minority who do insure their vehicles are being forced to subsidise others through higher premiums.

This issue should irk every insured driver because paying from your pocket for someone else’s bad behaviour, especially if you comply with the rules of the road, does not work in your favour. Not only does it affect you financially, but it also adversely affects your claim record.

Keeping insurance affordable becomes difficult to do when a large number of drivers do not carry their fair share of costs. We need to increase the number of insured drivers on our roads because ultimately, this will translate into a reduction in the cost of motor insurance.

With a bigger pool of paid insurance contributions, the insurance industry can pass on lower premiums and excesses to consumers. This is because the contributions of many will compensate the losses of the few.

We need car insurance to be mandatory for every car owner before the driver signs on the dotted line to purchase their car. This is standard practice the world over. Our view is that if you can’t afford insurance, you shouldn’t be driving a car because this means that you cannot adequately protect your or someone else’s asset in the event of an accident.

I call for legislation on compulsory third-party vehicle insurance to be re-introduced in South Africa, the idea of which was mooted by Finance Minister Tito Mboweni during his 2020 Budget Speech.

Compulsory third party insurance was enforced in South Africa from 1942 until 1997, which covered bodily injury and damage to motor vehicles when it was replaced with the Road Accident Fund (RAF). Whilst the RAF has provided financial aid for death and bodily injuries sustained in motor vehicle accidents, the cost of the damage to the vehicles is usually left to the consumer and the insurer.

While it may be some time before compulsory third-party vehicle insurance is reinstated, consumers should understand the ins and outs of their policy. If you are in an accident caused by another uninsured individual, your insurer will usually action third party recovery on your behalf if you are the policyholder. I suggest you take these extra steps to increase your chances of recouping the costs of the accident:

  • Always contact the police so that you have a case number, as your insurer will need the details of the case number to have evidence that an accident occurred.
  • It is vital to get all the information at the accident scene, including photographs of the accident scene and vehicle. This can significantly assist insurers in making a successful recovery of damages caused by a third party. You will need to know if the third party has insurance and, if so, the insurer and policy number, the driver’s ID, name and surname and contact details to assist you in lodging your claim and case.
  • Make sure you know what your excess structures are of your policy. In some cases, it can be more cost-effective to have a higher monthly premium that allows you not to pay an excess if you are in an accident with an uninsured third party. You will have to ask your insurer if they offer this. Also, bear in mind that many policyholders only find out about hefty excesses due at the time of a loss when they are ill-prepared to afford the payments, so it pays to know what your policy pays and what you are expected to pay.

Until such time that compulsory third-party insurance is introduced again, all motorists are encouraged to take out a proper insurance policy, even if it is only third-party cover. This is a cost-effective option that will, at the very least, ensure that you are covered if there is financial recovery against you for causing an accident,

Christelle Colman, spokesperson for Old Mutual Insure

COMMENTS   19

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How much are we paying for with the taxi industry, when you take into account that they receive government subsides, are the biggest killer industry in SA and most have been involved in accidents?

Would be nice to see factual founded comments, and to not just assume the taxi industry is uninsured. The taxi industry subvention only happened last year during lockdown, and I am not sure how it fits into this article.

I think the insurance companies should publish stats on how many accidents involve mini-bus taxis. They have the info and they should make it public. I am certain it is a considerable amount.

This situation reflects the typical communist dogma “From each according to his ability, to each according to his needs”

We have a redistributive socialist government and the situation with car insurance fits into this narrative. Those who can afford insurance carry those who can’t. Most people travel for work purposes. Modern economies provide efficient public transport to enable economic activity. The ANC destroyed our public transport system. The least they can do to compensate for their incompetence and negligence is to subsidize car and house insurance. This is how the government can reimburse decent people for the actions of ANC supporters.

Well, people cancel it because they can. That’s exactly the problem that requires a systemic intervention. If banks can insist that a hire-purchase must have comprehensive insurance as condition of the loan, then the traffic department must be able to insist on insurance as a condition of vehicle licensing, and compel insurance agencies to report insurance lapses onto the Natis system. A license scanner should be able to pick up if a vehicle is legally insured on the road. The technology is not a problem, it’s just a question of will. In the end, I have no sympathy. Anyone who can afford a car must either be able to afford insurance, or else scale down or take public transport.

Totally agreed. In the UK it is a criminal offense to drive a motor vehicle on a public road without any insurance.It is Compulsory and a legal requirement – finish and klaar.
I for one do not understand or see the difficulties here in legislating this into law.
That and an annual Roadworthy certificate to ensure said vehicle are reliable and not mobile wrecks!!!

Sadly my son has brain damage from car accident when he was only 18 months old due to serious negligence of people on the road!

We cant have 1st world laws in a 3rd world run government – WONT / NEVER WORK!

3 rd party cover, at least, should be compulsory.

Your ideas and suggestions are good – BUT once you bought the car and proved insurance you can cancel the insurance – most people do that after car finance is settled – – – WHAT THEN?
RAF system at least covers you against there being no insurance at all – with lawlessness in SA one can only expect this to be the first expense cut
As for Ms Colman – nice plug for your company, but do take time to consider all aspects before you want to advertise

There is a simple solution: in the UK, and other countries, when the cops pull you over, you have to prove you’re insured. Not having insurance, costs you a fine and points on your license. (OK, I agree – our traffic police are hopeless, but still…)

I don’t follow. I am insured, the other guy is not. We meet by accident and each have R100k damage. My insurance pays for my R100k, nobody pays for the other guy’s damage. How does it affect me whether the other guy is insured? Maybe I could have claimed my excess from his insurance if he had insurance?

Somebody on e told my our insurers operate on no-fault system : they don’t go after each other for whose client was at fault. Not so anymore?

I am no actuary but I guess it is a pure numbers game like life insurance. Everybody dies at some stage, but the more people buy life insurance, the more affordable the premiums because the risk is spread out and less concentrated.

I also believe that my insurance will claim from the other guy’s insurance if he caused the damage. If he has the means to pay but is not insured, he may be liable to refund my insurance company for the damages.

A broker can help us here.

What if he (uninsured) drove into you, Sherlock?

rjfock: don’t know about your insurance, but I am covered whether I drive into a tree, another car, it gets stolen, or after that guy in the parking lot leaves after reversing into my unattended vehicle.

Who is “she,” referred to in paragraph 6? “She adds that with a bigger pool of paid insurance contributions…”

Looks like this was copied and pasted – badly – from someone else’s article.

Vehicle insurance should be mandatory in this country. If someone can afford to buy a vehicle then surely they can afford insurance. No need to put other people through hell just because some imbecile cannot drive. And by the looks of it in South Africa there are plenty of imbecile drivers.
On our highways, people passing you on the left instead of being patient for you to pull to the left and then pass you. How many accidents happen as a result of this kind of idiotic driving?
Stop signs are not even stop signs any longer. We all know how this usually turns out.
And lets not start about the traffic lights. And this usually turns out far more serious for occupants of either vehicle in the event of a collision.

Mandatory third party vehicle insurance is fine for a first world country. If introduced locally, S.A. faces the prospect of having to take hundreds of thousands of vehicles off the road as a large majority of the drivers on S.A. roads simply cannot afford insurance.(That is, of course, no excuse for not having insurance.) But the government don’t want to be seen to penalise the poor in S.A. Not good at election time.
Politics once again!!!!

So the article says a 3rd is uninsured, and yet the writer says those who are insured are a minority (the 2/3)?

It would have been interesting to see figures in terms of insured vs uninsured by province, as my hypothesis is that people in smaller towns with lower incidents are likely to not have insurance, but not so true for big cities.

And the writer goes on to make a statement that insinuates that every uninsured driver is a bad driver – “This issue should irk every insured driver because paying from your pocket for someone else’s bad behaviour, especially if you comply with the rules of the road, does not work in your favour. Not only does it affect you financially, but it also adversely affects your claim record.”

I also don’t understand why the likelihood of being in an accident with a non-insured driver is so high (70%)?

It says a third in insured.

And thus that is why it is so high.

End of comments.

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