Wheels24

65% of SA cars NOT insured

2013-04-02 13:20

Johannesburg - Alexander Forbes Insurance (AFI) is demanding compulsory third-party damage insurance for ALL vehicles using South African roads... and it could cost R50 a month.

Currently, according to the AA, a whopping 65% of vehicles sharing the tar with you have NO INSURANCE AT ALL! If a wreck of a taxi hits your family car, the chances of the damage being paid for are pretty much ZERO - and that means you, the insured car-owner, will have to cough up for repairs for something that is no fault of your own.

AFI managing director, Gari Dombo, says a reduction in motor insurance premiums is possible as more vehicles will be covered with a bigger pool of contributors. As a result, vehicle insurance will become more affordable in South Africa.

LESS THAN 35% OF SA VEHICLES INSURED

Dombo says this will also result in an increase in the number of roadworthy vehicles on South Africa’s roads as more funds become available for Third Party vehicle damage repairs.

Motor industry experts also say that South Africa is one of the few countries in the Southern African Development Community that does not enforce compulsory comprehensive insurance on motor vehicle owners.

Gary Ronald, head of public affairs at the AA, “The hindrance for compulsory third party in South Africa is affordability with regards to insurance plans as we would first need to accumulate a fund to pay out third party claims, a fund which at this stage does not exist.

“There then begs the question of where this fund would originate, from the government or from commercial industry bodies.”

“If all drivers were to pay a compulsory fee of say R50 per month, of the 960 000 crashes we have per year, the fund would be bankrupt before we began, hence the need for seed capital to the fund to make third party payouts viable.”

FUND NEEDED TO PAY CLAIMS

Although the government has discussed introducing mandatory third party insurance, there is still much debate around the best way to collect payments.

Options being considered are the introduction of a fuel price levy, annual premiums when renewing ones vehicle licence, and/or an arrangement when you purchase your vehicle.
 
Countries such as the United Kingdom, United Arab Emirates and Italy have  successfully implemented third party insurance.
 
Dombo said: “Knowing that South African roads are safer will provide road users with greater peace of mind and ensure that the insurance industry as a whole remains sustainable.”

Wheels24's LES STEPHENSON WRITES "SA used to have compulsory third-party insurance but it was discontinued and some sources believe as many as half of the vehicles on SA's roads are totally uninsured. So if a skidonk clobbers your new BMW, it's your problem..."

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Comments
  • Mandy Ferreira - 2013-04-02 14:10

    You go to Mozambique, and you cannot drive there without car insurance. In Europe it is also compulsory. Wake up South Africa.

  • Steve Cullerton - 2013-04-02 14:35

    It should never have been stopped in the first place, let's have that compulsary insurance disc back on the windsreen asap !

      DeWet Vorster - 2013-04-03 14:24

      The compulsory insurance disk was never for vehicle damage. It was the forerunner of the current bankrupt Accident Fund.

  • Sipho Marete - 2013-04-02 14:43

    SA is a 3rd world country zoo and it gets ruled by primates. This will never happen, can you see the corrupt ANC government allowing this, In your dreams yes.

  • DerekMain - 2013-04-02 15:27

    Put this down to insurers greed. Even when you have a legitimate claim, you have to sweat blood to get it paid.

      Freddie Jones - 2013-04-02 16:37

      Not if you insure with a good company. If you go for the cheapest premium, you are liable to get this sort of problem.

      Freddie Jones - 2013-04-02 16:37

      Not if you insure with a good company. If you go for the cheapest premium, you are liable to get this sort of problem.

  • George Georghiou - 2013-04-02 15:56

    Nett result of high premiums. The business model is obviously out of sync with what is happening,insurance has out priced itself. In SA if sales go down the prices go up...Makes you think doesn't it?

  • Adrian Snyman - 2013-04-02 16:04

    I agree 100% ! I was in hit, and the guy never had insurance. I had to pay the excess, and he walked away not paying a cent !

      DeWet Vorster - 2013-04-03 14:26

      Do we really believe if the Govt runs this insurance that you will get your excess back. Or your insurance will be able to claim the cost of repairs from the Govt. No chance in Benoni. The bureaucrap involved will simply make it a non-starter.

  • Tshifhi GT-boy Mukosi - 2013-04-02 17:08

    insurance prices are just too expensive and the service when you claim is never satisfactory. I cancelled my insurance last month as the monthly premiums were just too high.

      Nare Ledwaba - 2013-04-03 08:28

      i also reversed my debit order cos my insurance just decided to increase my premium with R250 without notifying me.....and i have never claimed.

      Nare Ledwaba - 2013-04-03 08:28

      i also reversed my debit order cos my insurance just decided to increase my premium with R250 without notifying me.....and i have never claimed.

  • Sarel Brits - 2013-04-03 05:53

    If can not afford Insurance you most probably cannot maintain the car then you should not have a car.

      DeWet Vorster - 2013-04-03 14:27

      Give this man a Bells (when he gets home)

  • ProudSaffan - 2013-04-03 07:37

    Insurance companies greed. Taxed to death already and now the insurance companies see another niche to milk. We are a third world country without the individual wealth of a Europe etc, people cannot afford this, and whilst it may start at R50, within ten years it will be closer to R500, and the moguls in insurance will be smiling behind their hands all the way to the Benz dealership.

  • guy.ryninks - 2013-04-03 08:15

    Compulsory insurance is great. Its a way to keep the cheap skates in SA off the road. That's right Mr or Mrs Cheap its too expensive. And hopefully we will see less old beat up and smelly long-time eyesore scrap mobile skates on the road.

  • Gideon Van Zyl - 2013-04-03 09:42

    So what happened is taht we had 3rd party insurance and had to have a sticker with proof of insurance on the car front window. The government then changed the system that there was a third party levy on fuel. If I remember correctly, that levy became the Road Accident Fund levy, so in other words, we actually have the money that went to 3rd party insurance now being pumped into teh RAF. So - I am alll for compulsory vehicle insurance for all vehicles in South Africa, but really would like to know why the metamorphosis from the 3rd party insurance to the RAF has all of a sardine made the fact that we are already paying compulsury 3rd party insurance through a fuel levy?

  • colin.ashby.35 - 2013-04-03 13:35

    great idea and about time. BUT it wont be long before the insurance companies start jerking the prices higher and higher once they have the business. ON the other hand, maybe vehicles damaged will be repaired better, so we might have less road worthy cars on the road.

  • DeWet Vorster - 2013-04-03 14:20

    If the idea is to make uninsured vehicles insured the notion that "return of compulsory third-party" is incorrect. The "third-party" insurance of old was never intended to pay for damage to "third-party" vehicles but for injuries to persons. The current Road Accident fund was started with the proceeds from the "third-party" insurance of old. It was sold via the AA and Rondalia and the cost was below R50 PER ANNUM. So in conclusion this is not a "return of compulsory third-party" insurance but the implementation of accident insurance for third party vehicles. Something akin to "third party, fire and theft" Any vehicle which gets damaged beyond repair and is without insurance should be compacted without reimbursement. Period.

  • jango.za - 2013-04-03 14:45

    Very simple answer: Cannot afford insurance - cannot afford to be on the road. How are tires, shocks, and general road-worthiness issues then handled? So it's an obvious logic. Get rid of uninsured vehicles on the roads, and you probably get rid of 95% of unroadworthy clunkers at the same time. A safer place for all. 3rd Party cover should be a minimum insurance mandate, as it is overseas. Time to stop being a Banana Republic.

  • Harold Nkgudi - 2013-04-04 23:10

    It's surprising that insurance say this, true or not is valid but here are the facts: car insurance keep increasing but car value equally keep depreciating. What do majority insurance do, mum and enjoy that over insuring money and people only see this when their beloved car is write- off, and are paid market value of their cars less access. Demand a car insurance review every year, it must go down in relation to car depreciation, plus other personal risk profile, e.g. Aging. My last request, I was told if client don't ask it we won't do it. One can see greed, so called corruption is a social issue not a political issue, and the best u can do: if u change everything will change, if pointing fingers, complaining & being negative U will still be doing it in coming 5 years or more ( u can't change the wind but u can learn skill to adjust u sails).

  • Steven Van Der Sar - 2013-04-06 08:32

    I have saved R175 per month by comparing insurance quotes from www.car-insurance.org.za , try them they are very good.

  • Stanton Kgobudi - 2014-10-26 09:30

    Insurance quotes from Prime Meridian are reseanable. Every one can afford to hve some level of cover and third party liability cover.no excuse not to be insured

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