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Cell phone law will lower insurance premiums

Integrisure CEO says Cape Town drivers are likely to benefit from cheaper premiums.

6 July 2012 · Staff Writer

The much-hated new cell phone by-law, which was introduced in Cape Town this month, could actually help to reduce motor insurance costs according to industry experts. “This ruling is likely to result in fewer claims being paid due to a decrease in the number of accidents. Fewer claims mean a larger pool of premium funds and should therefore result in a subsequent relief in motor insurance premiums,” said Helen Szemerei, CEO at IntegriSure.

 

The law gives authorities the right to confiscate cell phones that are being used by motorists whilst driving, as well as fining the offender. It's part of the province’s campaign to cut the number of road deaths in half by 2014. Motorists who are caught using a cell phone without a hands-free kit will have their cell phones confiscated for 24 hours and will pay a R500 fine for their first offence, which can increase to up to R2 000 for subsequent offences.

 

“Cape Town has had a lot of success in reducing the number of road-related deaths and it is crucial that the success of this new initiative is monitored to determine whether it should become a national law. If it does result in fewer accidents on the roads then we would advocate this legislation being rolled out to all provinces.”

 

However, while hands-free kits reduce the level of risk a motorist faces, one of the biggest problems remains the fact that many drivers with hands-free kits still engage in texting whilst driving. “Global studies have repeatedly shown that texting while driving causes more accidents than talking, as the motorists’ eyes are taken off the road.”

 

Szemerei is not the only expert to confirm a likely reduction in premiums. The Business Day also reported that Rene Otto, CEO of MiWay, believed that the by-law was likely to result in a reduction of road accidents and therefore a lowering of premiums by insurance companies.

 

Szemerei also called for the by-law to be rolled out nationwide. “It is imperative that South Africans start taking the risks associated with driving seriously. People should only use their cell phones whilst driving in cases of emergencies and only then if they have a hands-free kit installed. If not, they should pull over to make a call,” she concluded.


 

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