Getting into a car accident as an uninsured driver in South Africa
Vehicle accidents happen in the blink of an eye and at a time when you least expect it, notes Hugo du Preez, short-term technical operations manager at PPS. As a driver, being involved in an accident is often a huge inconvenience, even if you walk away unscathed.
While insurers do their best to minimise the inconvenience, there is no escaping the paperwork and reporting at the nearest police station.
Given the current climate of the ever-increasing cost of living, the temptation to temporarily cancel short-term insurance to cope is high. However, while appreciating that consumers face financial difficulties, you should consider carefully before withdrawing your insurance, especially if you intend to continue driving your vehicle.
The low number of insured vehicles versus the high road accident rate makes it difficult for insurers to lower premiums. This is particularly so at this time of rising inflation with increased prices for servicing and vehicle parts, especially for imported vehicle brands.
So, what happens if you are in an accident and do not have car insurance? In essence, you are self-insured, and the cost of repairs will be from your pocket. One of the ways of protecting oneself, although not perfect, is through third-party insurance cover. This, however, only covers the other person’s or entity’s damages if it is determined that you caused the accident.
Some drivers erroneously believe that if they are uninsured and get involved in an accident with an insured driver – and the latter admits that they caused the accident – their insurance will pay the uninsured driver.
This is not the case. The insurer will not always pay for damages to your vehicle if you are uninsured, even if the other driver admits fault. An admission of liability at the accident scene will not be taken into consideration by any court. Every claim is measured on its own merits, and various factors are considered when accepting liability.
The uninsured driver may still pursue the matter legally. However, it may not necessarily work in their favour. The legal claim against the negligent driver who caused the accident is based on the Law of Collisions. These case laws are based on legal aspects and principles of road accidents, especially in terms of damage to vehicles.
The Apportionment of Damages Act will also apply in the settlement negotiations. The Act is applied when courts consider the extent of the negligence of all parties and apportion damages according to each party’s negligence.
However, in certain circumstances, such as a parked vehicle and rear-end collision, apportionment may not always apply.
It depends on the other party’s version of what happened and other merits. The calculation is done by applying the relevant case laws regarding the circumstances, meaning the percentage applicable will be applied to the “uninsured” third-party quantum amount.
Thereafter, the remaining percentage applicable (liable by the other party) or the insured party’s quantum amount must be deducted. Often, this leaves the uninsured party out of pocket. The onus will be on the uninsured third party to pay the difference to the repairer when vehicles are repairable.
The vehicles’ values are also considered when calculating the settlement amount for each party.
Scenario: the insured vehicle is valued at R1 million, and the uninsured vehicle is valued at R100, 000. The insurer agrees that their client was 80% guilty of damage to the uninsured vehicle. They will only pay 80% of the damages (R80,000); therefore, the uninsured is liable for 20% of the insured vehicle’s damages (R200,000).
It means that the uninsured will still owe the insurer R120,000.
Should the uninsured vehicle be written off, the insurer will deduct the salvage value from the settlement, which is usually 30%. Should the car be a write-off, insurers use the market value of the uninsured vehicle (not retail). An amount will be deducted for the salvage, which the third party retains.
This is usually calculated between 30% and 45% of the vehicle's market value. Thereafter, apportionment will also be applied as described above. To avoid the headache, it is always better to have insurance cover for your vehicle to avoid the stress and possible financial loss that comes with being uninsured.
- By Hugo du Preez, short-term technical operations manager at PPS
- The information provided herein does not constitute financial advice.
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