Insurance implications of being involved in an accident with an expired license

Lizo Mnguni, Spokesperson at Old Mutual Insure

Christelle Colman, Spokesperson Old Mutual Insure

While many motorists are relieved by the recent announcement regarding the grace period extension for the renewal of expired driver's licences to March 2022, there are questions about the insurance implications should a driver be involved in a car accident with an expired license.

This is also likely to be top of mind for SA motorists who have taken to the road given the third term school holidays, as well as during the upcoming festive season when national highways become jam-packed with holidaymakers en route to their destination.
Under normal circumstances, driving without a valid driving licence results in the instant dismissal of any motor insurance claims.

“We urge motorists who are in possession of an expired license, to check with their insurer via their broker, what their stance is on the issue, given that insurers are under no legal obligation to waive the otherwise very strict and necessary requirement for a valid driving licence,” says Lizo Mnguni, spokesperson at Old Mutual Insure.

In line with the Department of Transport’s announcement, Old Mutual Insure has decided to also offer a grace period to its policyholders until 30 June 2022.

“This decision will help alleviate any concerns policyholders may have about the insurance implications should they be involved in an accident while in possession of an expired driver's licence,” says Mnguni.

That said, the insurer is urging all policyholders and other motorists to renew their driver's licences ahead of the grace period, and not to use the extension as “an excuse not to renew their license, given that the non-renewal rate is alarming.”

According to the Department of Transport, nationally out of a total of 2.8 million expired licences, 1.2 million licence holders have not yet renewed their licenses, equivalent to a 42% non-renewal rate.

Christelle Colman, spokesperson Old Mutual Insure says that South Africa is already a heavily under-insured country, and the backlog poses problems to the safety standards of the national fleet.

Of the estimated 11 million cars and drivers on the country’s roads, it is believed that only about one third, approximately 3.5 million are insured. “We can surmise that more than half of the 3.5 million motor policy holders, almost 2 million people, face the prospect of having their motor claims rejected should they be involved in an accident.”

The Road Traffic Management Corporation (RTMC) is assisting with alleviating the pressure by encouraging South Africans to renew their licenses online. The Gauteng Roads and Transport MEC has also started a new campaign to deal with the backlog of licenses.