INDUSTRY OBSERVATION

SASRIA and the Road Accident Fund
- critical points for consideration

AT THE BEGINNING of this year, who would have thought the diesel price would soar to reach the dizzy heights it has? 

The good news about it all, of course, is that for once the advantage should sway towards the disciplined operator in that, with fuel consumption being so critical, the disciplined approach will be paying off by providing that operator with a big cost advantage over his competitors. 

I recently had a really disturbing phone call. It is common knowledge that the theft of vehicles has risen sharply. Well, that’s in our opinion at least. I don’t know why but every time I think of our borders, I picture a huge sieve where just everything is flowing through the holes.

Be that as it may, the distressed caller had a rig stolen and admitted he had no insurance on it. I really felt for him. In these times of high costs, he obviously thought insurance was the obvious area where he could save money – probably to put that money into his fuel tank. 

Please, to all clients, I urge you not to go that route. Just don’t go there. Don’t even consider such a strategy! This is not the right economic time to take such risks! Winging it without cover may seem smart but only until you have a big loss by theft or accident! 

I wish that caller the best of luck in respect of any recovery! Any theft/hijack knocks a hole in both the Insured and Insurer’s pockets - as we know so well. 

The other aspect about today’s economic climate is that we are seeing far too many “premiums unpaid” reports. Certainly times are tough. We are all aware of that. But, once again I urge clients to budget for premiums. Another ‘no- no” is for our business to work on a wish and a prayer by believing that premiums will be met notwithstanding that a client’s bank account is tight!

Ensure your SASRIA cover is spot on

Another valid point pertinent to today’s climate is to ensure your SASRIA cover is spot on! There are elements of dissatisfaction ranging from our neighbouring countries to the other side of the spectrum on our local front, such as striking police officers.

Economic difficulties can cause dissatisfaction and this will manifest itself in strikes, protests and the like. If in doubt, consult us, or your own Insurer. We are here to give you advice and confirmation of what events are classified under SASRIA. 

Another prediction of ours is that there is going to be heightened activity in respect of the Road Accident Fund (RAF). Passenger Liability covers passengers injured in a vehicle involved in an accident where a passenger is injured. In the event of a Claim, currently the first R25 000 will be claimed from the RAF. The balance of any claim will be claimed from the Insured’s policy. Inevitably for the Insurer this means a fairly long tail to a Passenger Liability Claim. 

In my opinion, the reason for the heightened activity will be either as a result of one - or all - of the following reasons:

1. The financial instability of the fund itself thus transferring the financial responsibility to Insurers like ourselves. 

2. Heightened awareness from passengers themselves (both authorized and unauthorized) of their financial and consumer rights. 

3. The constant and increasing accident trend. 

I stress again that for any claim from the RAF, there has to be an accident. I say this because we recently had a claim where the client’s driver stopped at the side of the road. An unauthorized passenger alighted from the client’s vehicle and was consequently run over. We would determine that this would not be a claim.

You are welcome to contact us for any opinions or advice on any of these issues.