A few years ago, 2013 if we’re remembering correctly, the International Transport Forum’s (ITF) Annual Road Safety Report estimated the economic cost of accidents to be R307 billion each year. That’s billions, not millions. It’s a terrifying amount of money to consider and surely 1 of the strongest reasons to invest in car insurance. There are so many insurance companies to choose from, making it super hard to know who has the best products, who will actually pay out, and who can be trusted.
Luckily, the South African parliament put certain legal acts in place to protect us from the baddies of the insurance industry. Before you head out to compare quotes or check that your policy is the best for your needs and your budget, let’s put your mind at ease and tell you a bit more about the laws that govern car insurance.
The wheels of justice
There are 3 main acts that govern car insurance law, including the Short-Term Insurance Act, the Financial Advisory Intermediary Service Act, and the Financial Services Ombudsman Schemes Act.
Here’s a quick rundown of each 1.
The Short-Term Insurance Act
This act deals with the way insurance companies should be regulated to prevent abuse, including rules which govern how insurers do business and the types of policies they can offer. On top of that, the legal requirements include the registration of all providers, the amount of commission that can be earned, the handling of fees, and the premiums that are allowed to be charged.
Essentially, this act protects you (the policyholder). The rights granted to you by these regulations cannot be signed away or waived legally. They’re as binding as Superman’s spandex tights.
The Financial Advisory Intermediary Service Act
While the above act deals with protecting the policyholder, this act deals with services and financial advice that a company, or its intermediaries, gives out. This typically includes making sure that professionals tasked with giving us advice and services, are monitored and properly licensed. It also includes supplying a general code of conduct for their behaviour, to make extra sure that everything is honest and fair.
The Financial Services Ombudsman Schemes Act
Before we talk about this act, let’s take a second to clarify who or what the ombudsman is. An ombudsman is an official who has been appointed to investigate complaints against a company or organisation. Man or woman, these individuals are responsible for determining the standards which insurers must reach in order to be recognised. They’re also responsible for approving all agreements, voluntary schemes, and policies in order for these to be binding.
And now to the act… Under this law, the duties and abilities of the various different ombudsmen is described and regulated. It’s as simple as that.
Your interests come first
From a legal point of view, these acts describe a detailed and specific set of laws governing car insurance law. You’re legally protected from any wrongdoing, and yet we must still warn you that you should only compare quotes from reputable insurance companies. (They exist, we promise!) And if you own a car and are uninsured, you’re taking a massive statistical risk… Rather gather a few quotes from those insurers who have a good reputation for paying out claims, tell it like it is, and offer a fair premium that you can afford every month.
For example, King Price has been in the business of offering super cheap car insurance for a number of years, they’re reinsured by Munich RE (a big deal in the industry), and their comprehensive car insurance premiums decrease every month in line with the depreciating value of your car.
Take a second to get a commitment-free quote and see how you could save yourself from risk, with the added bonus of saving!