Clock ticking on compulsory motor insurance

By Staff Writer

Ian Kirk CEO of Santam, the country’s biggest short term insurer, admitted today that he was engaging with Treasury over introducing a ‘no frills’ motor insurance product to target the 65% of drivers that are uninsured in South Africa. Kirk, who is set to talk to Treasury again at the end of this month on the issue, said government could put compulsory motor insurance laws back in place in two to three years time if the insurance industry introduced the right products. 


“There’s no particular deadline in place [on when the industry would have to deliver such product], but we are engaging with Treasury on a company level and through the South African Insurance Association. Introducing such a product in two to three years time is feasible,” said Kirk.


Kirk added that the industry would have to tackle affordability before a ‘no frills’ compulsory product is introduced. “We can’t introduce a product that will cost around R500-R600 per month in premiums. Premiums would have to be around R250-R300,” he said.


Kirk said that the product would offer more benefits than fire and theft cover but will not be as sophisticated as current comprehensive products. He explained that with premiums at that level a slimmed down version of the comprehensive product offerings available today would have to be offered to consumers. “We will have to slim down the benefits. Customers, for instance, may not be able to fix the car at a fancy repair shop and may only be able to get their cars repaired at certain times of the day.”


When asked if insured customers would trade down to the basic product, Kirk said he was certain consumers would choose the right product for them. “Consumers will choose the product they need. They will know the difference between the no frills product and the comprehensive product.”
 
 

Recent Articles

Featured Do you still need credit life cover when you have life cover?

When you take out credit, your creditors will require you to pay back what you owe no matter what your circumstances are. This is why they have credit life cover built into their loans to ensure you are still able to pay off your debt, should any unfortunate event occur. 

 

Read more

Are you ready to just tap and go when you pay?

The integration of the tap and go system has revolutionised the way consumers make payments. Instead of having to insert or swipe your card, you are now able to simply tap and have the payment registered almost instantaneously. But how safe is this?

Read more

Debt consolidation – Explained

Dealing with debt can be daunting. If you’re struggling to keep track of which store account to pay next and weighing up which credit card is more important to settle first, you may have considered debt consolation. At Justmoney, we’ve decided to get down to the basics and explain what this entails and what impact you can anticipate on your credit score.  

Read more

3 Vehicle financing options compared – which is cheaper?

Buying a car is a considered a milestone, both in life and financially. Unless you’re able to fork out the cash, many opt for financing. But often the excitement to drive it off the showroom floor overshadows the need to check if you’re choosing the most-suited option. To help you make the best-informed decision we compare available vehicle financing structures in South Africa.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Save with 10X investments

Price: Free
When: Until 30 June
Where: Online

Sanlam Cumulus Investment Plan Limited Offer

Price: From R2,500
When: Limited Period
Where: Nationwide

Roman's Pizza Special - Any Single Large Pizza

Price: R69.90
When: Until 31 July
Where: Nationwide