South Africa car cover

PLANS by the South African government to make third-party insurance compulsory for all drivers will eventually lead to lower prices for all, according to Leigh Friend, Johannesburg regional manager for MUA Insurance. Friend said the more vehicles that were insured, the bigger the payout pot. “Ultimately, what this means is lower premiums will be passed on to consumers, as the losses of the few will be compensated by the gains of the many”. He said research had shown only 35% of South Africa’s 9.5 million motor vehicles were insured at present. With the majority of claims because of accident rather than theft, Friend said the plan to introduce mandatory cover would work well to reduce prices. A few years ago, carjacking and theft made up 60% to 70% of motor losses, but this has now fallen to between 20% and 30%. However, Friend accepted “one of the bigger problems we face in actually establishing a workable compulsory insurance scheme will be how to fund it adequately”.