Long road ahead for compulsory car insurance

2010-06-25 12:40

Compulsory basic damage insurance on vehicles is being considered

by government but appears to be a long way from becoming a reality.

Transport ministry spokesperson Logan Maistry said: “It’s going to

take a while we’re still in the very early brainstorming stage on this.”

Maistry was responding to questions after Transport Minister

Sibusiso Ndebele’s announcement yesterday, in a written reply to a parliamentary

question, that the government was “considering making third party insurance a

requirement in South Africa”.

Maistry confirmed that the insurance being considered was for

damage to vehicles and should not to be confused with the injury and death cover

that drivers, passengers and other accident victims currently have in terms of

the Road Accident Fund, paid for by a levy on fuel sales.

Asked if it would be fair to say the process might take several

years before motorists saw legislation in this regard, Maistry said he did not

want to “pre-empt the outcome of the process”.

The transport department had yet to consult stakeholders, including

the private insurance sector, on the matter. Asked how such insurance would be

paid for, he said the treasury would have to be consulted so that any scheme

would be “funded and managed on a sustainable basis”.

Asked if the end result would be cheaper insurance rates for

motorists, he said this was the aim: “This is one of the things we want to

ensure, damage insurance has to be affordable.”

In his written reply yesterday to a question posed by Inkatha

Freedom Party member of Parliament Peter Smith Ndebele said there was currently

no legal requirement that all motor vehicles must be insured: “In terms of the

current legal framework, if a driver has been found by a court of law to have

caused the accident, the driver or owner who has suffered damages has a right to

sue the wrongdoer for damages.”

On compulsory damage insurance, the minister said a “strategy” had

still to be developed.

Ndebele said: “This strategy would take into consideration the

financial status of motor vehicle owners, the current fuel levy system operated

in South Africa and the proposed harmonisation of motor vehicles’ third party

insurance being discussed at the Southern African Development Community

level.”

According to reports, about two-thirds of the 8.5?million vehicles

on South Africa’s roads are not insured. It is understood the insurance being

considered by government will involve a basic level of damage cover, with

motorists being able to top this up with private cover.


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