RISK MANAGEMENT

Countrywide, South Africans are forced to travel from A to B on an ever-deteriorating road network, which makes driving a bit of a gamble, says Andries Wiese. This then begs the question: how do we manage the multitude of risks that are associated with these roads?

South Africa’s roads are in terrible condition. We used to drive on the left of the road; now we drive on what’s left of the road.

Roads are critical in supporting and contributing to the growth of our economy. The transportation of goods and produce must happen and, in the absence of a proper rail network or any other alternative, for that matter, the roads must carry the load.

The extensive use of our roads is but one of many factors leading to the steady deterioration of the infrastructure. In an ideal world, their increased use would lead to greater economic growth, allowing the infrastructure to be maintained. Not true in South Africa’s case.

Faced with this depressing status quo, what recourse do we have? I want to focus on the effect it could have on you as an individual, and more specifically on farmers.

We have to distinguish between two things: physical damage to property and goods, and injury or loss of life and livelihood. The reason for this is that many people still think the Road Accident Fund (RAF) will reimburse you for both.

The fact is the RAF has a mandate to provide appropriate cover to all road users within the borders of South Africa; rehabilitate and compensate persons injured as a result of motor vehicle accidents in a timely and caring manner; and actively promote the safe use of all South African roads.

WHAT IT COVERS

The RAF provides personal insurance cover to accident victims or their families, and indemnity cover to wrongdoers.

No provision is made for the vehicle or property, only the actual person. The cover extends to all members of society, including legal and illegal immigrants, foreigners, and owners and drivers of motor vehicles, as well as their passengers.

The cover provided by the RAF is limited and certainly will not be enough to reimburse, if that is at all possible, anyone for loss of life or limb.

However, it does go some way to ensuring a level of social insurance as anybody injured can claim. The RAF is funded by a fuel levy.

It is important to also note that the cover is not limited to certain roads; even that terrible dirt road running between you and your neighbour would fall within the ambit of the RAF.

INSURANCE POLICIES

So what do you do about the material damage your vehicle or goods suffered because of the pothole/s and general disrepair of the road/s you travel on?

Other than being careful, not driving at night if you can avoid it, making sure your vehicle and tyres are in good condition and avoiding excessive speed, which exacerbates any damage you may encounter, you could look to your insurer.

Insurance policies typically exclude losses if only the tyres are damaged.

Generally, the only exception can be found on agricultural policies, where tractors, harvesters and centre pivots should automatically include damage to the tyres if the vehicle is comprehensively insured.

It is not all doom and gloom, though. If there is accompanying damage to the vehicle from hitting a pothole and the chassis has been bent or the fender damaged, most insurers will see this as an ‘accident’ and should respond accordingly.

If, because you hit a pothole, lost control and caused an accident, somebody else suffers a loss or damage to their property or person, then your third-party liability cover will respond to such a claim.

Third-party cover on any vehicle should be the absolute minimum level of cover any vehicle owner should consider.

You could still patch your own vehicle, but what about your rich neighbours’ luxury German sedan?

TAKING RESPONSIBILITY

Your insurer understands that you travel on bad roads. If you are constantly claiming for this type of damage, they will typically increase your premiums, excesses, and possibly even exclude cover.

In a show of solidarity, the good people of Senekal have come together to clean up and repair their town.

Perhaps we should do the same and start taking responsibility for the roads in front of our own houses or farms?

In this way, we might even be able to drive on the left-hand side of our roads again, like we are supposed to. Andries Wiese is head of the Agri Division at Hollard Insurance. Email him at farmersweekly@caxton.co.za.

Subject line: Risk management.

AT THE VERY LEAST, ANYONE WHO OWNS A VEHICLE SHOULD CONSIDER THIRD-PARTY COVER