Having car insurance in South Africa can significantly help you if you’re involved in an unfortunate vehicle-related incident. In 2013, the International Transport Forum’s (ITF) Annual Road Safety Report estimated the economic cost of accidents to be R307-billion each year. Such alarming figures make it essential to have cover, but how do you choose? An encouraging factor when deciding on a policy is the effective set of regulations that govern these agreements, and protect you as a consumer.
The Wheels of Justice
The South African parliament has put Acts into place that are designed to protect consumers from unscrupulous insurance companies.
There are three main Acts that govern car insurance law, namely:
- The Short term Insurance Act – This lays out the way insurers should be regulated in order to prevent abuse and, interestingly, the legal requirements include registration of all providers. There are also directives that govern how companies do business and the types of policies they can offer. The amount of commission, handling fees, and premiums allowed are strictly prescribed. Additionally, this Act details a set of rules specifically tailored for policy-holder protection.
- Financial Advisory Intermediary Service Act – These regulations deal with services and any financial advice that a company or its intermediaries may provide to clients. This includes monitoring and licensing the various professionals involved, and supplying a general code of conduct for their behaviour, which demands honest and fair dealings.
- Financial Services Ombudsman Schemes Act – In this document, the duties and abilities of the various different ombudsmen are described. These individuals are responsible for determining the standards which insurers must reach in order to be recognised. Additionally, all agreements, voluntary schemes and policies must be approved by them in order to be binding.Another important task they fulfil is providing recourse and judgements on client complaints.
Putting your Interests first
Essentially, the Short-Term Insurance Act is a set of rules that protects policyholders. Remember that the rights granted to you by these regulations cannot be signed away or waived legally.
With such a detailed and specific set of laws governing car insurance law, what is there to worry about? You’re legally protected from any wrongdoing, so you can trust a reputable insurance company to keep their word and give you the cover you need. If you’re a vehicle owner and uninsured, you’re taking a massive statistical risk.
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