Non fault road accident insurance has been introduced
This removes lawyers from the system, and removes the need for legal fees.
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The decision to approve the introduction of a non fault road accident
insurance has been described as the Chief Executive Officer of South
Africa's Road Accident Fund as a "fantastic start".
Jacob Modise said that the new accident insurance would restore financial
soundness to the fund, which paid R11 billion in compensation to accident
victims last year alone. Out of this sum, R2.5 billion needed to be paid on
legal and expert fees.
The new no fault based accident insurance is meant to remove lawyers from the
entire system. Modise said that it was "wastage" and an "inappropriate
allocation of economic resources" that car accident victims need to fork out
over R4.3 billion of their compensation money on legal fees.
The legal profession is expected to lose billions of rands following the
introduction of the new insurance.
The South African Road Accident Fund currently has a deficit of R40 billion -
an amount that deems it insolvent.
The fund is a public entity that was set up by the government to compensate
people who were injured in road accidents (or their dependents if they are
killed) arising from negligent driving in South Africa.
The fund theoretically gets its money from a fuel levy that is included in
petrol and diesel prices.
Those entitled to make a claim include a person who was personally injured, a
dependent of deceased victim or a close relative of the victim for the purpose
of claiming funeral expenses.
Claims for medical expenses, funeral expenses, loss of earnings and income,
loss of support for dependents and general damages for pain and suffering can be
made within 3 years of the accident.
Compensation for a passenger in the "offending" vehicle is currently limited
to R25,000.
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