Research from the South African Insurance Association, which is in consultation with the government on the issue of compulsory third-party insurance, has shown that the number of uninsured vehicles on the roads is about 70%.
The Short-Term Insurance Ombudsman’s “urgent” call for the introduction of compulsory third-party motor insurance in SA should be welcomed by all parties involved, as motorists who insure their vehicles are in effect overpaying on their premium by having to subsidise those who do not.
This is according to Christelle Fourie, MD of MUA Insurance Acceptances, who says she supports the move, as an increase in the number of vehicles insured on the roads should also translate into a reduction in the cost of motor insurance for motorists.
“If the insurance industry has a bigger pool of premium contributions, ultimately what this means is that lower premiums and excesses will be passed on to consumers, as the losses of the few will be compensated by the contributions of the many.”
Fourie says the idea of establishing a compulsory insurance body is particularly crucial in a country such as SA, where few motorists insure their vehicles.
“Compulsory insurance is also critical for the motor industry as it will ensure an element of stability, allowing more repairs to be carried out, with the result that more of the vehicles on the road will be in an acceptable and roadworthy condition.”
Full story at fin24.com
