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Santam bridges gap left by Road Accident Bill amendments

Following amendments to the Road Accident Bill, Santam has introduced several types of personal accident (PA) insurance to bridge any gap in cover.

"Personal policyholders can now add PA to their existing policy or - if they are insured elsewhere - they can take out a stand-alone PA policy with Santam," explains Caroline da Silva, head of Commercial Underwriting at Santam.

On the commercial side, PA cover is available for the drivers of vehicles and specific road accident fund related products will be available to cater for road accident fund gaps.

"The approval of the Road Accident Amendment Bill means that many drivers may be insufficiently covered. We advise consumers to evaluate whether they will need to take out top up cover above that provided by the Road Accident Fund. Santam's flexible policy structure will allow them to choose between various limits and premiums to suit their individual needs," she says.

In line with international trends away from offering compensation on an unlimited liability basis, the amendment bill introduces compensation limits. These are seen as essential to preserve the future viability of the fund, otherwise compensation for victims of road accidents on South African roads will be severely curtailed.

Da Silva says that in the past, the fund paid compensation to road accident victims on an unlimited liability basis and, given the number accidents in the country, this has caused the fund to run into financial deficit of tens of billions of rands.

However, the amendments will leave gaps in cover for some road users. Specifically, claims for general damages will only be allowed if injury is deemed serious.

"Claims for loss of income will also be limited to an amount of R160 000 per annum. This will apply irrespective of the claimant's actual income level. The limit of R25 000 on passenger claims has been totally removed, however, and they will be able to claim for the same benefits from the fund as any other third party."

Da Silva notes that 'reasonable' medical costs will be covered, but the compensation will be based on public health tariffs which might be significantly less than the actual medical costs incurred if the third party uses private health care.

"The Amendment Bill proposes that the common law right to sue for loss suffered beyond the new limits has been removed except in respect of emotional trauma suffered by witnesses to accidents. This means that people will not be able to sue for any losses suffered beyond the new fund limits.

Da Silva says that any shortfall in compensation from the Road Accident Fund may not be recovered by suing the guilty driver. But where a person feels that compensation from the fund may be inadequate, they should purchase private insurance to protect themselves.