With stringent limits now applying to the Road Accident Fund to limit how much one can claim in injuries from a negligent driver, it may be good idea to take out additional insurance cover in case one is seriously injured in a road accident.
According to short-term insurer Mutual & Federal the public should be concerned about several changes within the Road Accident Fund Amendment Bill:
- The removal of the right to sue for injuries (or death) caused by a negligent owner or driver of a motor vehicle. The injured party cannot claim for any amount above the limits set in the new law, nor can the injured party claim from anyone other than the Road Accident Fund itself.
- The limit, irrespective of income, of R160 000 per year on loss-of-income claims to the Road Accident Fund. Those earning more than R13 000 a month are assumed to have the means to take additional personal accident cover at their own cost to ensure financial security.
- The restriction on the right to claim for general damages to “serious injuries” only.
- The use of public health rates as the basis for all claims relating to medical costs. The injured parties or their medical-aid plans have to meet any costs above this level.
Keith Kennedy, executive general manager: claims at Mutual & Federal, commented: “Features within currently available product ranges can be adapted to provide for the shortfall created by new limits on claims made to the Road Accident Fund.
“There has been no race to produce a special category of Road Accident Fund top-up insurance because the flexibility of product design and the broad range of covers available within the South African short-term insurance sector make this unnecessary.”
Kennedy added: “The flexible structure of most personal lines policies enables adjustments to be made to accommodate items of concern such as provision for disability as a result of an accident or for future loss of earnings.”
According to Mutual & Federal, the ongoing debate over the possible effects of fund amendments has put the spotlight on the enduring value to the consumer of the professional insurance intermediary.
Kennedy noted: “We understand the consumer’s concern and acknowledge that appropriate short-term insurance provision via a reputable broker may well be prudent for those whose death, disability or prolonged treatment would create financial hardship for their loved ones.
“The best advice for concerned consumers is that they should consult their broker and carry out a thorough review of their insurance cover, paying particular attention to income, lifestyle and the effect on the wider family in the event of the death or injury, whether temporary or permanent, of key income earners.
“Short-term insurance professionals know the available products and the product features which are required to accommodate specific needs.”
Mutual & Federal advises clients to undertake regular reviews as income levels change and new needs arise such as the increased importance of providing for the education of one’s children.