Govern­ment looks at com­pul­sory, ‘af­ford­able’ dam­age in­surance plan for ve­hi­cles

Weekend Argus (Saturday Edition) - - NEWS -

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

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