Insurance claims cost eThekwini R30m

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Published Mar 3, 2015

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Durban - Municipal vehicles worth more than R14 million were written off last year after they were damaged in accidents involving eThekwini Municipality staff.

This is according to documents released by the municipality.

The figure was more than R5 million higher than the previous year and accounted for nearly 50 percent of all the insurance claims paid out by the municipality’s Self Insurance Reserve Fund in 2014.

The figures are contained in a report, to the municipality’s Finance and Policy Committee, which came up for discussion at an executive committee meeting last week.

In total, the city’s insurance paid more than R30m in claims, which included comprehensive motor insurance, public liability, personal accident and fire.

It was, however, the R14.4m paid for crashes caused by municipal staff that caused the ire of opposition councillors.

The report blamed the “high accident rate” of council-owned vehicles and an increase in the number of vehicles that were written off for the spike in payouts.

“It seems we are just paying out money to whoever makes a claim,” DA caucus leader, Zwakele Mncwango, said.

“Something must be done because we are paying out too much. It makes one wonder whether these municipal employees can even drive.”

Minority Front councillor Patrick Pillay said it was important that municipal assets were protected and not recklessly abused.

“Whilst the municipality may have its own insurance department, it does not mean that the users of municipal assets may drive recklessly over potholes and damage or write off the vehicles... During the current economic crunch period, we need to save funding and not allow our ratepayers to be burdened in terms of indirect rates increases,” he said.

Deputy mayor, Nomvuzo Shabalala, said the insurance was not “just paying everyone who made a claim” and the money was not coming out of ratepayers’ coffers.

“We have more than 3 million people living in this city and with the size of our municipality we have to have insurance. This is our own insurance and it is there to protect us.”

Finance committee chairwoman, Fawzia Peer, agreed. She said that because the city had created its own insurance reserve fund it saved about 50 percent in premiums than if it had gone the private route.

The city’s self insurance had a reserve of R1.1 billion as at December 31.

One of the biggest jumps in insurance claims for last year was public liability claims which went from R2.6m in 2013 to R9.6m last year.

The report said the increase was due to a R5.5m pothole claim it made to Linda Mazibuko Attorneys in September.

The claim was the first tranche of a R21.5m settlement agreement between the municipality and former Durban student, Scott Taylor, who was left a paraplegic after he hit a pothole in Botanic Gardens Road in 1989.

In terms of the court order, Taylor will receive R16 499 999.50 but received a payment of R5m last September.

The Mercury reported that Taylor’s case against the city was closely watched by the legal fraternity because his lawyers, while filing a claim soon after his motorbike accident in February 1989, tactically waited until liability laws in South Africa were more favourable to these types of claims before proceeding with it.

Daily News

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