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What you need to know about the looming AARTO Act

30 March 2021 Santam

The long-awaited driver demerit system is likely to come into effect this year. The Administration Adjudication of Road Traffic Offences Act (AARTO) has been in the works for a while – since a trial in 2008, in fact – but it’s now firmly back on the agenda, with commencement planned for July.

Seen as a silver bullet to curb the country’s road fatality rate – South Africa ranks 13th out of 195 countries for its number of road deaths per capita – AARTO has big implications for drivers and their insurance.

Craig McLaurin, Senior Motor Underwriter: Commercial Underwriting Services at Santam, says AARTO is a positive act that should hopefully address the country’s status as one of the world’s most dangerous places to drive, “It will take a while to implement and enforce, but once it’s fully operational and South Africans understand its implications, it should make a dramatic difference.

“Currently, 90% of road accidents are preceded by a road accident offence. The threat of losing one’s licence is likely to change reckless behaviour for the long-term. This should have a collective knock-on effect on insurance premiums. Fewer accidents and fatalities mean the price should go down for everybody.”

AARTO in a nutshell
AARTO will penalise drivers and fleet operators who are guilty of traffic offences or infringements by imposing demerit points that could lead to the suspension or cancellation of licences, professional driving permits or operator cards. It will also encourage the payment of fines and reduce the burden on South African courts, by removing the initial option to elect to appear in court.

The number of points incurred will be dependent on the nature of the traffic offence or charge. Currently, there are over 2500 separate charges. All drivers will start with zero points. Once the limit of points is exceeded, a driving licence is suspended for three months. Driving a vehicle during this ‘prohibition period’ is a criminal offense, subject to a fine or jail time.

If a licence is suspended for the third time, it will be cancelled, and a driver must start from scratch with a learner’s licence, etc.
Demerit points do decrease by one point every three months, so drivers can work their way back down to zero.

What you need to know from your insurance perspective:

McLaurin and Liz de Villiers, Manager: Commercial Motor Underwriting at Santam, weigh in:

1. Ensure the points go to the right person: You need to notify the relevant authorities who was driving the vehicle when the law was broken. This is particularly important for companies, where cars could be registered in one person’s name, with employees authorised to drive it.

2. Tell your insurer if your licence is suspended/ cancelled:
If the licensing laws suspend or cancel the driving licence of the Insured or an authorised driver, as may happen in terms of the AARTO Amendment Act, the Insured would be obliged to notify the Company that a driving licence has been suspended or cancelled.

Subject always to the circumstances of the defined event, should a driver operate an insured vehicle with a driving licence that is suspended or cancelled, the policy may exclude all cover for the event.

Quick Polls

QUESTION

Covid-19 may accelerate certain industry trends. What are we likely to see?

ANSWER

Adoption of contactless technologies and digital experiences will likely be accelerating emerging technologies further
The consumer will expect safety and precautionary measures, driving the need for enhanced surveillance policies and technologies, which may pose potential privacy concerns
Rising activism among consumers and employees could drive an increased focus on corporate purpose
Value chain disruption is likely to lead to an increase in creative partnerships, which may in turn cause organisations to further invest in developing the mindset and agility to collaborate across sectors in the ecosystem
Cost management will be a critical priority to ensure business continuity based on cash flow requirements, to manage lower margins and revenues during a downturn
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