Industry Forms Working Group over Compulsory Car Insurance

Compulsory third party vehicle insurance scheme considered It is estimated that only 30% of our vehicles on the road are insured.

The South African insurance industry has established a working group to discuss advancements being made by the government regarding a proposal to introduce compulsory third party vehicle insurance.

According to the Managing Director of MUA Insurance, Christelle Fourie, South Africa is one of the only countries in the region that does not make it a crime to drive a car without third party insurance.

"I think it is good for South Africa because it is an anomaly that we do not have third party property insurance for our drivers," said Fourie.

"Estimates show that only about 30% of our vehicles (9.5 million) are insured and the industry has been asking whether this sustainable because of the high premiums being charged to protect those that are insured," she said.

With 65% of the vehicles on the roads being uninsured, the government is alarmed by the cost of accidents caused mainly by drivers of these cars and is calling for a compulsory third party car insurance scheme.

Another one to agree with the idea of compulsory insurance is Willem Smith, CEO of the Old Mutual owned iWYZE.

"If there is compulsory third party contributions, the overall cost of premiums should come down," he said. "At present, it seems a small percentage of insured drivers are paying for the cost of a large population.

Industry experts predict that compulsory insurance could bring annual premiums down to as little as R500.

While plans for the actual implementation of the compulsory insurance are still sketchy, insurance experts believe that it will eventually become a reality in South Africa.