Warning on Car Insurance Claims for Drivers

What Drivers Need to Know When it Comes to Car Insurance Claims

South Africans often underestimate what factors go into their car insurance and the claims process. Our road safety leaves a lot of room for improvement, especially as one of Africa’s record holders for the highest road deaths, it’s understandable why this rule exists. 

There is an underlying risk that is often overlooked by motorists when they take out car insurance. This risk allows insurers to cancel the policy altogether, and it’s an incredibly common problem on our roads. The alert for drivers comes from Elite Teixeira-Mckinon, the Lead Ombud of the Non-life Insurance Division at National Financial Ombud Scheme South Africa. 

Speed in South Africa is an issue in its own right, now add that into insurance and you’ve got a recipe for no cover. Insurers factor speeding into car accidents and claims process. Edite noted it as the “20km/h rule”.

Car accidents don’t come cheap, especially not for insurance companies. So, when it’s time to claim and assess the damage, acknowledging speed limits in the claims process is just one of many factors that ensures motorists follow traffic laws in order to maintain cover. But, not everyone reads the fine print or is aware of this when the time comes.

According to Edite, every crash leads to “higher repair costs and insurance premiums for all policy holders.” Speeding in this case, is a common contributing factor in most crashes. It’s going beyond the point of no return that has serious financial consequences for the insured driver. If excessive speeding is determined to be the cause, then insurers have the right to reject the claim under the ‘due care’ clause. 

The point of no return in this case is having exceeded the speed limit by 20km/h. There is no grace limit unlike with traffic fines. 

There are various methods where insurers determine if a driver’s behaviour is reckless or negligent. It’s up to the insurer to investigate what they consider an issue. However, that’s not to say you’ve got the green light for speeding, it’s a matter of discrepancy and total honesty in the report.

What Does ‘Due Care’ Mean to Insurers?   

Due care is how much effort drivers put into adapting, changing, and defending the way they drive based on the following: weather changes, road conditions, pedestrians, and other known road hazards. It’s about driving responsibly.

For example, to drive without due care could mean that – you as the driver – were caught driving recklessly or lost focus and failed to use reasonable care. Keep in mind, the definition and strictness of it could vary from one insurer to the next. 

The point is to always be on the responsible side of driving, whether you’ve been in a car accident with or without speeding, honesty and effort matters. To minimise the risks and prevent potential collisions:

• Take up defensive driving as it prepares you for unintentional hazards. 
• Align your driving with weather and road conditions.
• Keep within the speed limits at all times, in suburban areas and on the highway.
• Follow local traffic laws at all times.

What Does South Africa’s Speeding Limits Look Like? 

AARTO’s latest traffic fine system has gained a lot of momentum in the way rollouts are concerned. This means the rumours can be put to rest about demerits and criminal records as the new system becomes a reality across multiple municipalities nationwide. 
Strictness on speed limits vary from province to province, so what you may not find in Johannesburg will be applied in Cape Town or Durban. 

Thanks to The Road Traffic Infringement Agency (RTIA), here’s what South Africans can expect from speed limits based on grace period and cost:

The 10km/h grace period is still in place under AARTO. This grace limit is reserved for minor accommodations based on “speedometer calibrations.” So, if the speed limit is 80km/h, you will be charged if you go over by 10km/h or more. The warning comes though with overreliance on this “buffer.” 

The cost of speeding varies based on the new AARTO demerit system.

For reference (Example) 

• By going over the limit by 10-11km/h, you could end up paying a R400 fine and receive 1 demerit point. 
• If you exceed by 19-20km/h, your fine will account for R1,400 and multiple demerit points will be added to your record.
• Passing the limit by 25-30km/h, you’re looking at R3,200 and 5 or more demerits. You’re coming very close to getting your licence suspended or removed from the system altogether. 

You can expect similar penalties when it comes to speeding on the highway. 

You can read all about the penalties in our article here: Alert on speeding fines in South Africa. 

Types of Car Insurance 

There are three types of car insurance policies that are available to motorists: Comprehensive insurance; Fire, Theft, and Third-Party, and Third-Party Only Car Insurance. 

There’s quite a difference in terms of budget. That’s why we’ve covered each type of insurance cover based on budget here: How to find the most affordable car insurance. 

Comprehensive Car Insurance 

Comprehensive Car Insurance financially covers extensive damage involving your car. This includes: weather damage, fire, theft, third-party damage, car accidents and more. This top-tier cover is a little more expensive compared to the others, and is suitable for those that have the budget and lifestyle that calls for complete cover. 

Fire, Theft, and Third-Party

Fire, Theft, and Third-Party is a mid-tier type of insurance that financially covers you in the event of fire damage, stolen vehicle, and damage and injury to third-party property and your own. This insurance is ideally for people who have paid off their cars, those who live in slightly high-risk areas, and remote workers or retired individuals who don’t spend as much time out on the road. 

Third-Party Only 

Third-Party Only insurance is basic cover. It acts as an affordable option for many, and is designed to cover those who own older vehicles and don’t drive often. You’re covered for damage to third-party property and vehicle only, your car is not covered. 

How Long Does it Take for Insurance to Pay Out for Car Accidents

Being involved in a car accident or minor collision can add a lot of twists and turns depending on your situation. The issue with the claim process is that it can while, but being prepared with the right information to process your claim swiftly is important.

What one insurer pays out may vary. The factors that can affect your claims process or delay the process are as follows:

1. The level of damage of your vehicle affects the length of investigation.
2. The type of cover limits and exclusions set out in your policy.
3. How often you’ve claimed affects premiums and questions credibility.
4. Certain documents unaccounted for.

Some insurance providers pay out within a few days if you’ve processed the incident immediately and with the right information, while others can take weeks to a few months – depending on the complexity of the case and the disputes that have been reported. 

How to Appeal a Car Insurance Claim Decision

Unfortunately, a lot of providers report insurance fraud and deal with claim history that goes beyond believability, affecting innocent clients in the process. But if that’s not the case with you, there’s something that you can do. 

Thanks to the new National Financial Ombud Scheme, you can freely leave an appeal on your car insurance claim, especially if it’s been rejected or things get complicated with your insurer.  The NFO is designed to help both insurer and policyholder reach mutual agreement or come up with a fair resolution.

Services from the NFO are free of charge which makes it suitable for budget-conscious clients to reach out and discuss matters in a way that legal matters would be handled (just not at an alarming cost). 

The Bottom Line: Finding the Best Car Insurance

Finding the best car insurance is all about your budget and needs. It’s about finding a provider who can offer you the right type of cover that won’t send you to the poor house. It’s important to have the right team by your side, just as long as you're honest.

Remember, with every claim you make, premiums go up. Try not to claim after every little bumper bashing or collision, make an effort to drive responsibly so that your record remains clear from questioning eyes or unnecessary investigation. 

Finding a quote online can also feel overwhelming, but MotorHappy can get it all done for you so you don’t have to scope one by one. We source the best provider with the best quote for clients and their vehicles, whether you’re looking for complete cover, half-and=half cover, or basic cover.