By Dianne Smith
Financial disaster, even bankruptcy, could be lurking in the shadows for millions of road users.
The South African Insurance Association (SAIA) estimates that an astounding four million of the six million vehicles on our roads are uninsured, meaning road users stand a 66 percent chance of being hit by an uninsured motorist.
For the innocent motorist, this could mean not only physical and psychological trauma from a road accident but huge medical bills if their medical aid doesn't pay, plus the prospect of thousands of rands in legal fees trying to recover money from a driver who is probably too poor to pay anyway.
This is because the Road Accident Fund, which is funded by a fuel levy, can take up to three years to settle claims, and it doesn't pay for damage to vehicles.
According to the Automobile Association, there are about 80 accidents - from fatal collisions to vehicle damage only - for every 1 000 vehicles on the road.
"Your chances of being hit by an uninsured person are pretty high," says SAIA executive Caroline da Silva. "You could find yourself facing huge legal costs if you are uninsured. If you're insured and are hit by someone who is uninsured, you will have to pay for the excess on your policy and face higher premiums.
"The insurance company pays against third party but, because the person is uninsured, the company will have to sue, and this involves legal costs. This adds to the overall insurance premiums. And at the moment, 65 percent of all premiums go towards paying for accidents."
Angelo Haggiyannes, director of a large national insurance company, says the situation poses a real threat to motorists and that the consequences could be devastating.
But, he explains, it involves "more than just metal to metal" - especially when a person is injured, because then "it can get very ugly".
Injured road users can claim against the Road Accident Fund but have to prove negligence by the driver.
Depending on how contentious the case is, claims can take between three and five years to be finalised and for the victim to be paid out.
In this case, an innocent passenger will be paid a maximum of R25 000 and will have to claim the rest from the uninsured driver.
For the person who has become a quadriplegic, this could be devastating.
Most comprehensive insurance policies cover for third party injuries as well. The passenger is able to claim against the insured driver, who can be covered for up to R2,5-million.
"The average consumer doesn't understand that this is a real threat. What if you knock down a child, who was an aspiring athlete, and have no insurance? It could ruin your life," says Haggiyannes. "And the odds on an accident occurring are frightening."
AA public affairs manager Gary Ronald says choosing not to insure vehicles is a growing trend. But these motorists literally risk losing everything. "Extensive and expensive litigation could lead to financial ruin."
He warns that some people choose to pay the equivalent of their monthly insurance premium into a savings account, specifically to be used as a private accident fund.
He says that isn't a good idea because it would take 20 years of accident-free driving before a person would be in a position to cover themselves.
Da Silva says a possible cheaper solution would be the introduction of compulsory third party insurance. (The Road Accident Fund is a type of third party insurance but only covers injuries to a person and not to property damage. It is funded via a fuel levy.)
"In many First World countries, like the United Kingdom, Germany and Australia, compulsory third party insurance exists. Since it's not compulsory in this country, our uninsured pool is large.
"People who do buy comprehensive insurance will fund insurance for those who are uninsured. This also makes it unfair."
Transport department media liaison head Mike Mabasa says the number of uninsured vehicles on the roads is not a government issue as yet, apart from its involvement with the road fund.
But he adds it will have to be considered by the government in the future because the number of vehicles is increasing annually and the situation could get even worse.