It is with bated breath that I listen to stories of accidents. I fear, not only for loss of life and bodily injury, but also for the financial impact of such vehicle crashes. We always ask the dreaded question “Is your car insured?” – And too often do we find the answer to be “NO!” According to the South African Insurance Association only 30% of vehicles on South African roads are insured!
When vehicles are not insured the owners risk an often lengthy and difficult time in challenging the other party in attempting to find compensation for vehicle damage. Vehicle owners are challenged with the following:
- Dishonesty
- Lack of witnesses
- Fraudulent statements in accident reports
- Lack of evidence
- Long time delays
- Expensive legal fees etc
Car insurance can protect the vehicle owner and help to avoid some of the above threats to his financial security. But when will car insurance and the laws of car insurance protect the consumer?
In the unfortunate event of a vehicle crash, the protection is unfortunately only available if the vehicle owner does indeed have car insurance. To use the example or analogy of football – if you play a social game on the rugby fields you are not offered sufficient protection against malicious tackles, foul play and transgressions of the rules of the game. You have to be “in the game” and playing in a “regulated” game to be offered the protection of the rules of the game, referees, yellow and red cards etc. The same applies to the vehicle owner in the event of a vehicle accident – you need to be an insured vehicle owner to receive the protection offered by the car insurance laws.
The good news for vehicle owners [and potential vehicle owners] is that the consumer does not have to wait for a vehicle crash or vehicle loss to be offered protection. Car insurance laws provide protection to consumer from the very moment that he considers car insurance and consults a financial advisor or insurance company!
The best summary and example of such protection is found in the description of the objectives of the Policyholder Protections Rules:
“The objective of the PPRs is to ensure that any…. or short-term insurance policy sold to you is entered into, executed and enforced in accordance with sound insurance principles and practice in the interests of the parties (you and your insurance company) and in the public interest. In simple terms, this means that when you make a legitimate claim for a benefit, you will receive it and the insurance company will be there to pay it.”
We have recognized the need to include the car insurance laws and a discussion of the protection offered to the consumer in the Car Insurance Blog. We have identified these important pieces of legislation:
Car Insurance legislation includes:
- Short-Term Insurance Act (Act 53 of 1998 as amended)
- Policy Holder Protection Rules (Short-term Insurance), 2004
- Financial Advisory Intermediary Service Act (Act 37 of 2002)
- Financial Services Ombud Schemes (Act 37 of 2004)
This has been included on this Blog at Car Insurance Law in South Africa and we will discuss the impact of these laws and how they protect the vehicle owner. Be insured to have peace of mind that you will be protected within the regulatory framework of South African Car Insurance Laws.
