Car insurance may become mandatory

2010-06-24 14:01

Cape Town - Government is considering making third-party insurance compulsory for all drivers using public roads, said Minister of Transport S'bu Ndebele on Thursday.

Ndebele's statement follows on the back of figures released by the Democratic Alliance, which showed about 65% of the 8.5 million vehicles on South Africa's roads are not insured. This, argued the DA, puts the burden of compensation for accidents on insured drivers and insurance companies.

In reply to a question in parliament, Ndebele said the strategy of making third-party insurance mandatory was on the cards. However, it would require careful consideration of several factors, including the financial status of motor vehicle owners and the present fuel levy system.

Ndebele also said even though third-party insurance is not mandatory at the moment, accident victims may pursue compensation through the courts.

Ndebele also confirmed that the demerit point system for traffic offenses (Administrative Adjudication of Road Traffic Offences, or Aarto) will have been rolled out fully to all municipalities by December, despite the fact that pilot projects have highlighted some system glitches.

"The allocation of demerit points to infringers will be introduced on a national basis from April 1 2011. To date the pilot project in both the municipalities of Tshwane and Johannesburg has revealed a number of aspects that needed to be addressed. These relate mainly to legislative, operational and systems aspects," said Ndebele.

"Systems performance issues relate to the electronic uploading of infringement information, and the online, real-time updating of transactions onto the National Contraventions Register," said Ndebele.


  • Simon - 2010-06-24 14:04

    Whilst a good idea how will they ever enforce it. They are far better off increasing the annual license fee to include 3rd party insurance.

  • Johnathan - 2010-06-24 14:06

    Just as you are not able to drive your car if you can't afford fuel, you should not be able to drive your car if you can't afford insurance. It's as simple as that. The "with regard for the financial status of vehicle owners" bit is twaddle!

  • praveen - 2010-06-24 14:11

    I think this is an excellent idea. I met with an accident and has not received any compensation from the other driver who was proved to be negligent. It costed me over R20000.00 to repair my car.

  • Adrian@Simon - 2010-06-24 14:18

    Moron, that wont work either. people who are already paying insurance will be paying double insurance. Instead, they could get insurance companies to disclose who their clients are and then make provision on the licence disc to show that the particular vehicle is insured. If a car is not insured then the owner should not be able to renew his car licence disk!!

  • chris - 2010-06-24 14:18

    That is a fantastic idea as happens in the USA. The next positive action is to legislate that any Police Officer without a Nametag and Force Number on his/her chest has no powers of interrrogation or arrest in a public place.

  • Gululani - 2010-06-24 14:18

    Good move in the right direction.

  • JC - 2010-06-24 14:19

    Who wants to be a millionaire ? , another rip-off scheme

  • Joe - 2010-06-24 14:22

    Simon has a good idea. If you do have insurance, then you pay a smaller registration fee. Another important consideration is the fact that the accident rate is so high because of various factors, many attributable to the state of the roads, illegally obtained licences, bribery to get away with reckless driving and the state's inability to govern the roads properly. So over and above the curret tax money not being effectively utilised to provide safe roads, there is an additional financial burden on insured motorists who pay inflated prices to cover the high risk associated with our roads. Talk about the growth rate: for every hundred Rand spent by consumers, what portion is wasted on these types of ineficiencies instead of value creating activities. Although panel beaters might have it great in this environment, their function is just to put something back to the way it was, not creating something new that can be exported for revenue. Multiply this concept across all sectors. I'd rather have the state employ more road builders than police officers. The true cost of inefficiency is the lost opportunity and this is the fundamental reason why free trade is always better geared for growth than government owned institutions.

  • roofis - 2010-06-24 14:24

    We used to have third party insurance as mandatory many years ago. The token was similar to a licence disc, and had to be displayed next to the licence on the windscreen. (Don't remember why this was stopped)

  • Ian D - 2010-06-24 14:26

    @Johnathan - couldn't agree more. What about the financial status of gun owners for that matter, as both car and gun need licences and both can kill? Insurance should be a minimum of third party and payable in conjunction with road licence fees - no pay = no drive! Caught = jail time!!!

  • Foom - 2010-06-24 14:27

    Pursue compensation through the courts? Right, so long as you don't mind spending the bulk of the compensation on bloodsucking lawyers, the world is your oyster.

  • iK - 2010-06-24 14:28

    I can see the insurance companies smiling, time for them to up their fees and prepare for a waterfall of money...

  • Eric @Simon - 2010-06-24 14:32

    True, but what happens if you already are insured with a private insurance company?

  • Phil - 2010-06-24 14:32

    Three aspects should be enforced...IE The vehicle must be licenced, must have a current COR (MOT in the UK ) and must have up to date insurance. In the UK the Post Office issues the annual vehicle licence. Very easy to control. If you can't afford the insurance, then you should not own a car.

  • TurboChris - 2010-06-24 14:35

    In the UK the insurance company's use your points to up you insurance, the more points you have the higher risk you are and the higher you premiums, seems they want to do the same here. And by the way, don't we pay a tax in our fuel levy for 3rd party insurance, years ago it was compulsory to get external 3rd party and you had to have a disk in your front window to prove it but this was done away with as it was included in the levy.

  • GrimRippe - 2010-06-24 14:40

    MMM I was under the impression the a porsion of the petrol price you paid goes to 3rd party????? OH, sorry thats to Zuma or Nelsons PARTY for some dop!!!

  • Realist - 2010-06-24 14:43

    I like the statement "a number aspects remain to be addressed. These relate to legislative, operational and system aspects". Not much remaining that needn't be addressed?

  • Markus - 2010-06-24 14:52

    well the enforcement is easy . when registering a car you have to bring the insurance card with you (in germany this is the case ) So when people go for registering or renewing the licecnce they must produce the insurance documents . I also agree with Jonathan "with regard for the financial status of vehicle owners" bit is twaddle!

  • Aki - 2010-06-24 14:56

    "it would require careful consideration of several factors, including the financial status of motor vehicle owners". If you can't afford 3rd party insurance then use public transport. Less cars on the road = less chances of accidents and less road deaths (and that could also mean reduced insurance premiums). My car has been involved in 3 accidents caused by the other motorists and I couldn't escape from. None of them had insurance and I didn't bother chasing them as the "chasing" costs would have been more than what I spent at the panelbeaters.

  • Lujar - 2010-06-24 15:00

    Thats really crappy, insurance should not be compulsory at all, whose benefiting on that anyway? Politicians!!! Our insurance is damn expensive for example a Renault has no market valu ebut the insurance goes up ridiculously high.

  • jack - 2010-06-24 15:02

    How will they ENFORCE this? They can't even get taxi drivers to obey the rules of the road!

  • Curious George - 2010-06-24 15:02

    Agree! Does govt intend that 3rd party insurance will cover unroadworthy vehicles, smooth tyres, drunk drivers etc?

  • lloyd macklin - 2010-06-24 15:08

    Here we go re-inventing the wheel again. Compulsory third part insurance was compulsory at one stage but some clown then decided against it. It was not a huge amount but even a nominal amount on every vehicle being allocated to a dedicated fund would solve much of the problem. Sadly, the money will be miss-spent

  • CarNutter - 2010-06-24 15:08

    Brilliant idea. It should have been implemented a long time ago. And while we're at it, force the insurance companies to start making use of the demerit system to reward safe drivers. Why should I by paying the same as another guy just because we are the same age. Rather charge me on my history of driving...

  • Ant-Taxi - 2010-06-24 15:08

    If the Taxi Industry paid their taxes, government would have enough money to fund the road accident fund. ANC has neither the will nor the capacity to make this happen

  • Fred Basset - 2010-06-24 15:10

    If 3rd party insurance was compulsory, AND PROPERLY ENFORCED, we could get rid of the Road Accident Fund, which has to be one of the most outdated bureaucratic structures in SA today. I know of people still awaiting payouts from the RAF for claims settled more than 5 years back!

  • Jason - 2010-06-24 15:11

    About time. It happens all over the world, so it should be workable at some level.

  • Brenda - 2010-06-24 15:13

    Good idea, but if you cant ensure all drivers are licensed, and driving licensed vehicles - how do you manage something like this?

  • Ken - 2010-06-24 15:15

    Brilliant, This is about time! How about also ensuring that all cars goe for a six month Waranty of fitness as well. This will help job creation as well as ensure more lives are saved on the roads. Public transport should have a 3 month waranty of fitness as they travel much more that a car. This improve safety on our roads.

  • Deon - 2010-06-24 15:17

    In the UK when your car tax is up for renewal(Which is each year) you can go online to renew it..But to get it two checks are done, is the car currently insured and has it passed a MOT (roadworthiness test)... If all this can't be proved you can't renew your car tax and your vehicle becomes unroadworthy... So the cops can pull you off and impound your vehicle.. People can bypass the MOT with all the corruption, but it would be much harder to bypass and fake the insurance in order for this check to pass... Even if you can't yet do it online, this check can be enforced when you take our your car tax at the DVLA...No insurance no certificate

  • Andrew - 2010-06-24 15:18

    Simon I agree with you, with the whole country having to have 3rd party insurance I should not be that steep, and it must be included in your annual license fee. I am still waiting for the courts and insurance company to recover my R2900 excess, its been 13 months that I am out of pocket because some knob drove up my exhaust pipe. Watch the taxi strikes coming shoul this insurance become mandatory.

  • Edna - 2010-06-24 15:18

    All 8.5 Million Uninsured vehicles would insure their vehicle is 1) Theyh ad money for it and 2) The insurance Companies were not so sly. I have insurance all my life until I realised that my insurance company was taking me for a ride. If your car is in a small accident they will gladly pay up however should yoy write your car off, they will do anything and find anything and I mean anything to repudiate your claim. And I am not singeling any Company out, all of them are like that

  • Sean - 2010-06-24 15:18

    Was this not a law some time back? Didn't they drop it since very few were actually sticking to the law?

  • W - 2010-06-24 15:19

    Am I mistaken but was it not compulsory in the distant past to have 3rd party insurance and to display a disc on your windscreen to prove payment had been paid? This was discontinued and replaced by a levy to finance the Road Accident Fund. To reintroduce compulsory 3rd party insurance without reducing the road fund levy would effectively be having to pay double for the same cover.

  • Trevor - 2010-06-24 15:22

    About time. Insurance companies should offer it and the rates must be flexible, based on the driver's record. More points, more kilos driven and more accidents, should up the rates. Then bad driving will hurt the pockets of those responsible.

  • Chris - 2010-06-24 15:27

    this works well in Europe. So we'll drop the taxes on the fuel price currently covering 3rd party? Probably not...

  • Ken - 2010-06-24 15:27

    Reading this article more carefully in my oponion it totally unfair of the minister to penalise people who work hard, pay insurance, try to improve their lives by going to pay futher for legal fees.As the Minister is a member of parliment, he would know that the courts have a huge back log of cases outstanding for years already. What really needs to happen as the DA says and not because they say it , it is because it is logical, all cars should have 3rd party insurance. There should be a warranty of fitness done on each car every 6 months. Delivery, Construction and public transport vehicless need to do this every 3 months as they drive many more Kilometres. This will create jobs for sure and most importantly there will be more lives that are safer on our roads. But why waste energy, logic does not seem to prevail in our country.

  • BigD - 2010-06-24 15:29

    Here we go again... riding the gravy train... just like toll gates was only supposed to charge road users untill the expenses was recovered... the money they are talking about here will also disappear into the Big Black Hole.

  • Riaan - 2010-06-24 15:30

    In the states you don't have proof of insurance your car gets impounded, as easy as that. If everybody at least had 3rd party insurance comprehensive insurance would also become cheaper as there would be more policy holders contributing to damages and also the risk would not lie just with the usualy inocent drivers insurance company. GOOD Idea over due.

  • Tried and Tested - 2010-06-24 15:32

    Long overdue, enforce it thru each driver having to produce his insurnace documents when his yearly licence disc is issued, no insurance no licence disc. It works like this in Europe you actually have to display you insurance disc on your car. Drop the fuel levy and free up cash for the drivers.

  • Gary - 2010-06-24 15:34

    Simon, overseas, you are required to provide proof of insurance when you renew your annual licence or licence a new car. This is provided by your insurance company. As for increasing the annual fees to cover this? WHY, because then people who are already insured are now paying TWICE for those that don't. We've been hit twice by people who didn't have insurance and we've had to fot the excess both time of R2500. That's not fair when we weren't at fault on both occassions.

  • andy - 2010-06-24 15:38

    They can do what ever they want, have the grandest schemes/plans, but until there is a competent, corruption-free authority managing it, it is useless. IMO, should your vehicle not be insured by one of the many short term insurance companies, a mandatory insurance fee should be added on top of your yearly licensing fee. Obviously, if your vehicle is already insured, you'll have to provide proof of insurance when renewing you license. You then get issued with your new license disc as well as a proof of insurance disc. Enforcement will be easy - in order to renew your license you WILL have to either pay the insurance fee/provide proof of insurance and you WILL have to display the proof of insurance disc on your vehicle. Failure to have insurance would lead to your vehicle to be impounded until such time as proof of insurance is provided.

  • Wasp - 2010-06-24 15:39

    Simon, while it sounds like a great idea it is not. It is like everyone paying the electricity bill of Soweto, when they should be paying it themselves. Why do you want to pay for someone else to have an accident and be compensated, when you are left out of the loop?

  • Crypto - 2010-06-24 15:44

    @Simon: Yes and then we that already have car insurance will pay more so those who dont have insurance are not obilgated to get? Make third party insurance compulsary but also be strickter on vehicles that are not road worthy!

  • Bogie - 2010-06-24 15:44

    @Simon - U dof or what - this will maean that insured will pay double - insurance + extra levy

  • Dot - 2010-06-24 15:44

    The best idea i've heard in a long time - proof of insurance should be produced every time a traffic officer asks for your drivers license

  • Francois - 2010-06-24 15:45

    I really hope this implemented. @Simon - Great idea.

  • PAR - 2010-06-24 15:46

    In the same manner as you cannot buy a TV without a licence you should not be able to purchase a vehicle without at least Third Party Insurance. However, this should be run by insurance companies and not government as it will end up like RAF where we are paying fuel levy for a pittance of compensation. The demerit system will do nothing to reduce the carnage on our roads as Metro Cops are the laziest most corrupt officials. No one stops at red robots but I have yet to see a cop stop a car. LET US STAND TOGETHER AND ALL DRIVE THE SPEED LIMIT AND BANKRUPT THE LAZY COPS THAT ONLY KNOW HOW TO SIT BEHIND THEIR CAMERAS.

  • Peter - 2010-06-24 15:47

    If you cannot afford to pay for damaging someone else's car you should not be on the road. The sooner it becomes compulsory the better.

  • Morgan - 2010-06-24 15:48

    I remember, up to the mid 80's you had to buy a third party insurance disc on a yearly basis and this had to be displayed on the windscreen of the motor vehicle. But it was scrapped and was included into the price of fuel. Now is this another money making scam? So does this mean that the price of fuel will decrease.