The heavy cost of uninsured drivers

Having uninsured drivers on South African roads imposes an unfair burden on insured drivers and their insurance companies.

South Africa has about 8, 5 m vehicles of which only approximately 35% are insured. In short, there are over 5.5 million uninsured drivers on our roads.

This means that in South Africa “the burden of compensation for the high accident toll falls heavily on insured drivers and their insurance companies who are mostly not able to recover costs from uninsured drivers. This burden is, in turn, reflected in ever-increasing vehicle insurance premiums” says Gari Dombo, Managing Director, Alexander Forbes Insurance.

Every month there are thousands of crashes causing vehicle and other damage. While in developed countries all drivers have to be insured or they are not allowed to use public roads, in South Africa insured drivers, or other owners of property are left to foot the bill for these accidents – through their insurers.

In response to global recession and high unemployment, South Africa has seen a spike in defaults on monthly vehicle policy payments - while other vehicle owners have downgraded their cover in order to pay cheaper premiums.

While reducing cover may ease financial strain it is not always the best solution. For example “if you reduce your cover to third party fire and theft, you will still pay for any damage caused to your car if you are involved in an accident with an uninsured driver” explains Dombo.

And it really doesn’t matter how cautious a driver you are. With 65% of the vehicles on our roads uninsured, if you do have an accident, there is a 2 in 3 chance that this will be with an uninsured driver – and that you, or your insurer, will be paying for damage” adds Dombo.

So, if you are involved in an accident with any driver, make sure you note the driver’s name and address as well as the vehicle make, model and registration number. Also, record as much detail as you can about the accident scene. Whether traffic lights were working or whether the other car was speeding, had lights on, had indicated etc. All these details are important as the other driver, insured or not, will use every opportunity to put the blame on you so that your insurance will pay out. It is also a good idea to, if possible, identify an independent witness and get their contact details as this may strengthen your case.

The motor insurance industry is currently collaborating on how best to facilitate compulsory third party damage cover. If there was compulsory universal cover “everyone who suffered damage in an accident would be able to recover their losses” says Dombo. Furthermore, compulsory universal cover may result in lower premiums for currently insured clients as risk is taken up by the previously uninsured.

Certainly the current situation, in which conscientious drivers who insure their vehicles are, along with the insurance industry, being made to pay for irresponsible motorists is extremely unfair. “Not only does this cause untold damage but is also, to my mind, one of the most pressing consumer abuse issues in South Africa” concludes Dombo.