Government looks at compulsory, ‘affordable’ damage insurance plan for vehicles
COMPULSORY basic damage insurance on vehicles is being considered by the government, but appears to be a long way from becoming a reality.
“It’s going to take a while... we’re still in the very early brainstorming stage on this,” said Transport Ministry spokesman Logan Maistry.
He was responding to ques- tions yesterday after Transport Minister Sibusiso Ndebele’s announcement on Thursday, 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, 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”.
He said the end result would be cheaper insurance rates for motorists and that this this was the aim.
“This is one of the things we want to ensure... It (damage insurance) has to be affordable,” Maistry said.
In his written reply on Thursday – to a question posed by Inkatha Freedom Party MP 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, he said a “strategy” had still to be developed.
“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 SADC level,” Ndebele said.
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 will involve a basic level of damage cover. – Sapa