Maya Fisher-French

2014-09-11 00:00

IF you are uninsured and crash into another vehicle causing tens of thousands of rands of damage you are liable for those repairs.

Even if the other driver was insured, his insurance company will go after the guilty party and if they are not insured, they will sue them in their personal capacity.

Rather than running this substantial risk, a driver can insure against third party claims for around R100 per month.

While insurance companies have always had the ability to go after uninsured drivers to recover the costs of damages, the litigation has not always been worth the cost.

That however is changing as the profits in the insurance industry are under pressure, mostly due to the fact that only one third of South Africans have vehicle insurance picking up the tab for the rest of the drivers.

As profits come under pressure, insurers are starting to recover costs from the guilty third party and this can include insurers threatening to attach personal assets if the driver does not have the required third party insurance cover. It is not only beneficial to the insurance company to reclaim damages, but also for the insured client. With two out of every three drivers being uninsured, the chance of being hit by an uninsured driver is very high and the insured driver loses his or her no-claim bonus resulting in increased premium and has to pay the excess for the car to be repaired.

“In my view, claiming from a third party is the prudent and responsible thing for an insurance company to do,” says Rene Otto, CEO of insurance company MiWay, who says if they do not recoup costs they need to charge higher premiums in general to all their clients. “In my mind, it is not fair to our clients in general to charge them more for insurance just because we shy away from suing the guilty third party who caused the damage to our client’s car. We also have a duty to try and recover our client’s excess as far as possible,” says Otto, who adds they would attach assets if it makes sense in the circumstances.

“There is no difference in law between a person’s liability from causing damage to someone else’s car and the liability from not paying any other debt. We try to avoid attaching someone’s assets by coming to an amicable agreement, but in some cases it is our only option”.

The amounts involved in the accident do determine whether or not the insurer will sue as the insurer needs to take legal costs into ­account, but they will certainly go after larger claims.

Otto says pleading poverty does not necessary get the guilty party off the hook as if you are not actually poor the plea won’t succeed.

“In many cases, we reach an agreement whereby the other party pays the amount in question off over a period of time”.

If you cannot afford a fully comprehensive insurance you can still protect yourself from a third party claim by taking out third party insurance for as little as R50 to R100 per month, according to Otto.

While this amount will not pay for your own vehicle to be repaired, it will protect you should you bumper bash an Aston Martin.

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