Insurers are becoming more enthusiastic about suing uninsured drivers to recover costs.
If you are uninsured and crash into another vehicle causing damage amounting to thousands of rands, you are liable for those repairs. Even if the other driver was insured, his insurance company will go after the guilty party and if you are not insured, they will sue you in your personal capacity. Rather than running this substantial risk, a driver can insure against third-party claims for around R100 per month.
While insurance companies have always had the ability to go after uninsured drivers to recover the costs of damages, the litigation has not always been worth the cost. That however is changing as profits in the insurance industry are under pressure, mostly due to the fact that only one-third of South Africans have vehicle insurance, which means that they are picking up the tab for the rest of the drivers.
At a recent insurance conference, Santam CEO Ian Kirk said, “Insurers have let the rates slide and that is a fundamental issue” – insurers are currently making losses on motor insurance due to high claim volumes.
Christelle Fourie, managing director of insurance company MUA, says falling profits are due to a number of reasons including premiums that are too low, an increase in the cost of repairs due to the weak rand, the state of our roads (potholes, etc, still pose a major challenge), as well as the number of uninsured vehicles on our roads and the number of unlicensed drivers on our roads.
“On top of this, we find ourselves in an incredibly competitive market with motor rates being driven down in spite of the serious warning signs with regards to motor insurance profitability,” says Fourie. The natural result is that insurers must manage their claims costs extremely well, and this includes recovering costs from a guilty third party. This can include insurers threatening to attach personal assets if the driver does not have the required third-party insurance cover.
Compulsory insuranceFourie says the South African Insurance Association are currently doing research into how compulsory third-party insurance could be initiated. “There are many challenges, of which one is the affordability of this type of insurance. In addition we must consider that many people are unemployed and the level of premium will determine the success of this scheme.” Other challenges are around the method of premium payment, whether it is by debit order or cash, and how this fund will be managed, as the Road Accident Fund has been very poorly managed. “At this stage, I believe letting the commercial companies take the lead on the issue, possibly looking at capping the claim amount on third party for the initial rollout phases. This would allow for a reasonable level of premiums.” |
It is not only beneficial to the insurance company to reclaim damages but also for the insured client. With two out of every three drivers being uninsured, the chance of being hit by an uninsured driver is very high and the insured driver loses their no-claim bonus, resulting in a higher premium, and also has to pay the excess for the car to be repaired.
“In my view, claiming from a third party is the prudent and responsible thing for an insurance company to do,” says Rene Otto, CEO of insurance company MiWay. She says if they do not recoup costs, they would need to charge higher premiums in general to all their clients.
“In the cases where our clients cause accidents, we incur the costs of repairing our clients’ car as well as compensating the third parties for their damages. In the cases where the third party caused the accident, we incur the costs of repairing our client’s vehicle, but we then have the right to recover those costs from the third party. If we didn’t do that, we would forego a meaningful source of income and it would become more difficult to make a profit,” says Otto who adds that the only option would be to increase the premiums they charge all clients.
“In my mind, it is not fair to our clients in general to charge them more for insurance just because we shy away from suing the guilty third party who caused the damage to our client’s car. We also have a duty to try and recover our client’s excess as far as possible,” says Otto, who says they would attach assets if it makes sense in the circumstances. “There is no difference in law between a person’s liability from causing damage to someone else’s car and the liability from not paying any other debt. We try to avoid attaching someone’s assets by coming to an amicable agreement, but in some cases it is our only option”.
The amounts involved in the accident do determine whether or not the insurer will sue, as the insurer needs to take legal costs into account, but they will certainly go after larger claims. Otto says pleading poverty does not necessary get the guilty party off the hook as if you are not actually poor the plea won’t succeed. “In many cases, we reach an agreement whereby the other party pays the amount in question off over a period of time”.
Fourie says her company will do financial checks to determine the individual’s ability to repay the damages claimed and often agree to paying the debt off over a period of time, even up to three years.
If you cannot afford fully comprehensive insurance, you can still protect yourself from a third-party claim by taking out third-party insurance for as little as R50 to R100 per month. While this amount will not pay for your own vehicle to be repaired, it will protect you should you bumper bash an Aston Martin!
Do you benefit if your insurer sues?Fourie says MUA will reduce the insurance premium back to pre-claim level as soon as the recovery is successful and will credit the insured with the pro-rata portion of the increased premium due to the claim. MUA will also reinstate the no-claim bonus as if no claim has been submitted against the policy. Fourie says in most cases, the insured will be refunded the excess almost immediately after the insurance company receives the payment into their bank account. Otto says MiWay refunds the excess once they have recovered an amount that is equal to or larger than the excess. “If the excess was R2,000 and the debt R20,000 and we succeed with a partial recovery of say R5,000, we will refund the excess,” says Otto who adds that if the insurer abandons the third-party claim for any reason – in most cases because the likelihood of success appears to be slim – the client still has the right to attempt to recover any excess from the other party. |
Good day, I need advice urgently please. I accidently drove into parked vehicle in a parking bay and not much damage was done. The vehicle I drove into retail value is R68k, however the paint damage to the bumper that needs to be repaired is R35k – how is this possible, that I need to pay half of what the car is worth for paint damage to a bumper? I do not have insurance and their laywer wants to summons if I dont agree to pay for the damages, which has already been repaired, although I have requested 3 quotes, which I did not receive. Where to from here?
As far as I am aware you have a right to three quotes
Hi There. Someone drove into the side of my vehicle the other day while reversing out of a parking bay. The driver caused 65k damages to my car. He was a foreigner. I took a photo of the accident, his foreign driver’s license, his “uncles” car registration disk and got his cellphone number which he never answers. Is this enough information for my insurer’s to go after them to recover the 65k they will spend on my claim? I have no excess and have been with this company for around 10 years with very few claims. Should I worry about my premiums shooting up? Thank you so much for your advise
From personal experience the insurer will only go after him if there is a good chance he has the means to settle the amount. If they don’t believe they will, then it is not worth their time really. Yes it could affect your premiums – it depends on how they view your over-all risk, but it shouldn’t be significant. What you can do is ask them to review the premiums again in about two years if you have no further claims.
Hi,
I am so depressed about my situation, I have been flagged for anxiety by my Doctor. Due to salary cuts, my car insurance lapsed during the lockdown. I was hit at traffic light by someone who decided to stop at a red light, then run the red light. by so doing, he hit my car as i was crossing the intersection as I had a green light thus right of way. He has apologized for his mistake and provided me with claim number to claim 3rd party from his insurer. However,
– My car will likely be written off as the cost to repair it is R30k less than its current market value. There is a R50k difference between the market value and bank settlement. I cant get another car until i settle this balance which will be about 7months. I need my car for work and other things, what can i claim from the guy with regards to this? Can he pay for a car rental during this period while i pay the bank the balance?
– My medical aid has not covered all the medical bills i incurred for being taken to hospital for my injuries by the ambulance. Can I sue for these costs?
– his insurance is talking about an Apportionment of Damage Act, saying they wont pay 100% of the market value of my car and that they will deduct salvage value from the settlement, leaving me with an even bigger balance to pay to the bank is my car isn’t repaired and written off. What are my rights here? the guy admitted fault.
Please help 🙁
If you were injured you can lodge a claim with the Road Accident Fund. Do you have insurance? Your insurer can usually handle these disputes on your behalf.
you could go the legal route – maybe it is worth speaking to a lawyer
Hi can you please advise me on what I should do. In 2021 there was an accident I was involved in. A car just came to a dead stop which resulted in me rear ending someone who was driving a company car a small Nissan van. The damage to his car was not bad as I swerved to avoid the accident and got my fender damaged by a hard black part on his car. We exchanged details and took pictures of the damages. The accident was not reported as we both moved from the scene amicably, my cousin is my witness. Now 2 years later I get an sms from a collection company that an account regarding this accident was handed over. There was no communication whatsoever from the gentleman nor his company, as far as I was concerned everything was fine, now I am handed over for what appears to be repairs on the car, for R22k – I didn’t even scratch or dent his car, instead my car’s fender was damaged. What should I do
The onus in on the lawyers to provide you with all the information and proof that you were notified of the claim etc. Ask for all of that information to be provided to you. Do not admit any liability. Are you insured?
Good day. I was in a freak accident. I was driving a friend’s car (with permission and her insurance was aware that I use the car). The car I drove was parked on an incline. I was outside the car. The handbrake failed, car rolled forward and it scratched a second car (just minor scratches, however fixing them will be expensive as a whole panel has to be replaced). A third car was also damaged more severely, (that owner claimed from his own insurance and it was fixed). I was injured in the process, but reported the incident to the police and my car’s insurer as soon as I was released from hospital. I did not claim for the repairs on the car that I drove, I paid for the repairs out of my own pocket because they were not too expensive and it would save me the administrative hassle. I did inform the insurance of the repairs. The owner of the second car did not claim from her own insurance, or reported the incident to her insurer within the specified timeframe. The owner of the second car opted to claim from the third party insurance on my friend’s car. They rejected her claim and said that handbrake failure was not due to negligence on my behalf. She asked me to pay for her car repairs out of my own pocket. I feel truly sorry for her, although the scratches are small it will be quite costly to fix, and I respect the fact that she would like to keep her car in a good condition. I just feel that if my insurance agrees that I was not negligent, then why should I pay for fixing her car? It would the same as offering to help her pay if a tree branch fell on her car and caused damage. What are my rights? And what other options does the third party have to get her claim resolved and her car fixed?
It sounds very odd that the insurance company requires demonstration of negligence to pay out. If for example you crashed because breaks fail, it would still be an insurable event.
I think she should take the case to the Ombud for short-term insurance. https://www.osti.co.za/
I was hit in the rear at a traffic light but I’m not insured. Can I claim from the person who hit me as he is insured?
yes you can
I was in an accident where someone drove into me from the right hand side in the round a bout. I know that i might be wrong as the car hit my front door just as i wanted to leave the round a bout. I stopped my insurance a month ago as i wanted to sell my car.
Can i ask their insurer to send me 3 quotes for the car to be fixed and will i be able to pay it off in monthly installments?
That is such bad luck… yes you can arrange to repay in installments. Insurers are just happy to get someone else to pay!
What if I can only afford the person’s excess amount and not the full amount if the damage.
They can take a judgement against you – or come to an agreement to repay over time
Thank you for the feedback and answers. They told me I can pay them monthly but only gave me one qoute. I asked them for another qoute. They told me the damage is a certain amount that I have to pay. Can I negotiate with them to pay a lower amount if I pay it in full?
You have a right to a competitive quote. Insurers use a standard form for pricing, but you can ask the driver to go to another panel beater. You just need to decide if it is worth the hassle. In terms of paying less upfront – give it a try. They may agree
Hi,
Any particular company that has 3rd party cover for around R100? Struggling to get quotes for only 3rd party.
Try https://www.naked.insure/ – I think MiWay also offers it
Hi,
A taxi drove into me and my insurance company said that the access on my claim is R4500, they are trying to recover the funds for the repairs and access from the taxi driver that was transporting children for a 3th party. The driver has agreed to pay R100 a month until the balance of the damages has been paid, so I won’t get my access until than? Is this fair on me? The insurance expects me to wait 4 years to get my access refunded to us?
Insurance company said the guy has agreed to pay and has not disputed that he is in fault so they can’t force him to pay more that what he said he can pay per month R100?
Insurance is suppose to leave you in the same position you were in before the claim, but i’m out of pocket R4500?
I would need to ask the short term ombuds but possibly the only option is that the insurer pays you the R100 a month they collect. An excess is something you agree to, so part of the contract. You can opt for no excess but the premium is higher.
Hi
I was involved in an accident whereby the third party hit my car at the back and I also hit a car in front of my car. Insurance has written off my vehicle and it short paid what I’m owing the bank plus I put down 20% deposit when I bought the car. Can I sue the third party for for the difference that I owe the bank and my 20% deposit that I paid? The party was uninsured.
No, your debt is not linked to the insurance claim. They would only be responsible for the value of the car
Hi,
I was involved in a bumper bashing in March, obviously since I’m the one who rear ended the vehicle I am responsible according to the law. I then received an invoice of an astronomical amount and from my pictures taken there is no way that bill is a reflection of the damage caused by my vehicle. Please advise what options I have as the insurance company without sending me any communication decided to hand me over to a lawyer who is threatening me with a summons. I don’t mind paying for the damage I caused however I can’t be paying for things I never damaged.
Good question – you do have the right for three quotes. Who is the insurer?
Santam. The lawyer is refusing to give me a break down of the repair invoice.
legally they have to – stick to your guns on this one and don’t let them bully you. They have to provide three quotes
Santam also sent me one quote and sent me a Final demand because I’m not willing to pay what can I do
I was involved in an accident in November whereby I swerved to miss a car that had skipped a stop street and when correcting my car I went head-on into another car coming up the road.
I am not insured and the car I hit had ample time to avoid me but didn’t.
Their insurers have paid them out but are trying to recoup that settlement from me.
I was involved in a 4 car pile-up yesterday. We were stopped at a red robot, which had just turned green. We were a few cars back so had not started moving yet. The car behind me did not stop and rear-ended me, causing me to go into the car in front of me, and pushing that car into the car in front of it.
The back car, which caused the accident is the only insured person. Will her insurance pay for my damages, as I am not insured?
Thanks
That is a difficult one to answer as some insurers use a shared liability clause which allocates “blame” – so would look at what measures the other drivers took to avoid the accident. For example they may ask if you had your handbrake on at the time. It would also be a chain of events. The front driver would claim from the driver behind, that driver from you and then you from the back driver. Which insurer is it?
As a side note, this is one of the reasons why you should have insurance – this would all be handled by your insurer!
Hi, I was smashed into by a drunken driver who was driving his brother’s car. According to the driver the car was not insured. At the scene of the accident the driver did admit he had a lot to drink and he did appear to be heavily intoxicated. However the municipal traffic department officials did not subject him to any tests. He was not charged by the SAPS did not open a case against him either. While I was in hospital for a medical assessment, he was released to go. My car was paid up. I made a claim with my insurer and was advised my car to be written off. I was made to pay access fees towards my claim. My insurer has processed my claim and payed me a payout. I was advised by my insurer that they will try to recover the access fee. Is this all the driver will be liable for ?
Hi
I have recently been involved in an accident whereby the driver infront slammed breaks to avoid a pothole whilst it was raining, unfortunately my car couldn’t stop in time and I rear ended her, I am not insured as I just bought the vehicle. I am now liable to pay 100k out of my pocket, money of which I don’t have, why must I fit the bill for a municipality issue and the driver who slammed beaks with out hazards warning the rear traffic of her complete halt. What grounds do I have to plead my case, I don’t mind paying in but 100k and I still need to repair my car.
You can try approaching the municipality as they do pay out for damages caused by potholes but in this case they are not likely to do so as it was not directly due to the pothole. The reality is that it could have been anything she had braked for including a pedestrian. Unfortunately this is the risk of not being insured. Not to get on a soap box but insured individuals pay a premium of around 30% due to the fact that so many other drivers are uninsured. If everyone took out insurance the premiums would be more equitable.
Hi, I need some advice on what to do in a case whereby i accidentally hit a car of a driver that slammed her breaks to avoid a pothole without any hazard warnings. The owner of the car managed to fix her car hassle free and did not even pay an excess fee as the car had a small bump by the bumper and a scratch. Her insurance paid for everything but are now after my pockets as they want me to compensate them for their costs. What should I do in such a case?
If you had been insured, her insurance company would have claimed from your insurance. As you are not insured, they will claim directly from you. You can ask for proof of repairs and costs