Insurers Call for Compulsory Third Party Car Insurance
South African insurance companies are going to ask the government to make third party car insurance compulsory so that people with car insurance can pay lower premiums.
At present the 40% of car owners with car insurance subsidise the 60% who do not have car insurance. And that includes those who have third party car insurance only.
Gari Dombo, the managing director of insurance at Alexander Forbes says this means that only 4 million of the 12 million cars on South African roads are insured, even with third party car insurance. “The insured cars are subsidising the uninsured cars,” he said.
Third Party Car Insurance is a Heavy Cost
More than 80% of the claims that car insurance companies pay involve accidents. At present insurers cannot claim from third parties if they do not have third party car insurance.
Third party car insurance means that in the event the vehicle causes damage to another car, the owner will not be liable for the damage. Instead the car owner’s insurance company will pay.
Car Owners Who do Not have Third Party Insurance Are Doing the Industry Down
The way things stand, if someone who causes to someone else’s car does not have third party car insurance, the person whose car incurred damage has to claim from his or her own insurance company.
Dombo says if car owners had by law to have third party car insurance then the industry would grow and become stronger.
Insurance is about figures. If people buy third party insurance in larger numbers then the premiums would decrease.
Third party insurance costs very little – around R120 to R130 per month.
“This would allow panel beaters and assessors to become part of the mainstream industry,” said Dombo. “We are currently talking to the national treasury about compulsory insurance.”
The earnings of South Africa’s five largest short term insurers decreased by 12 percent in 2013. That was due largely to weather-related claims.
Dombo warned that the profitability of the industry could be dampened due to motor insurance claims from accidents where one party does not have third party car insurance.
Some Car Theft Statistics Should get You Phoning an Insurance Broker Quickly
R8,5 billion worth of cars were stolen in South Africa during 2013 – about 66 360 cars. 15% of these involved carjacking incidents, reports the SA Bureau for Insurance Crime (Sabic) and R5 billion of the cars left the country, said Hugo van Zyl, CEO of the bureau.
Carjacking increased by 11% in 2013 to 11 129.
“Vehicle crime is a market-orientated crime that affects South African citizens in various ways, “said van Zyl. “The public are not just victims of carjacking and car theft. They are also unwitting victims when they buy cloned stolen cars from theft syndicates,” he said.
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All info was correct at time of publishing July 3, 2018
