June 15, 2020
It’s no secret that the National Lockdown has negatively impacted the livelihoods of many people in South Africa. Under such financial stress, it would be tempting to forego monthly insurance premiums. We will examine what the implications and risks are should you plan to stop insuring your car.
Car insurance is complicated, and this article should only be considered as information. However, if you are planning to purchase a car insurance product, a certified financial advisor will be able to provide you with professional advice.
The National Traffic Information System, eNaTis, shows that the total live vehicle population as on 30 April 2020 was 11,491,126.
Only a few South Africans could potentially afford to have no car insurance, but the average motorist may not be able to for many reasons. Car insurance is designed to protect the driver from a potential financial disaster. Imagine having a car crash without any insurance cover at all? Firstly, you stand to lose the car you were driving, because you may not have enough cash to fix it. Secondly, you may have to face a massive damage claim by the third party if the accident was your fault. Can you afford to pay out of your pocket a claim of say R200,000? If not, a possible lawsuit could follow.
Some South Africans have still not gone back to work in level 3 of the lockdown. It is tempting to stop paying car insurance premiums since the lockdown period only allows you to go to the local grocery shop just down the road. Indeed, by travelling less frequently, the accident risk is lowered, but there is still a chance of something going wrong. This is, unfortunately, a reality for some motorists.
In 2018, it was estimated that one out of three drivers had illegal drivers’ licences. The implications of this are enormous. The sole purpose of obtaining a driver’s licence is to ensure that the motorist is fully qualified to drive a particular vehicle. You have had to pass specific standards, such as obeying the rules of the road and how to drive safely. Potentially, it means that anyone with an illegal driver’s licence does not know how to drive on our streets, nor is aware of all the rules and road safety. They pose a significant danger to other motorists.
The chance of a third party being insured in the event of an accident is 3 out of 10. This also means that no matter how careful you are while driving, a car can suddenly and dangerously crash into you, through no fault of your own. Unfortunately, you will most likely not be able to rely on the third-party to bail you out for all the damages caused because he/she has no insurance cover.
We can see from the above that it may be too risky to drive without any car insurance. Not only are our roads dangerous, but the potential financial disaster that could result from a crash is just too horrible to contemplate. If you are struggling to pay your premiums during the lockdown period, why not consult your insurance agent? If you have no cover or need assistance, why not contact PMD and purchase affordable car insurance?