Drinking and driving and the effects on your insurance

Coming up to the festive season people will possibly be drinking more at family and business celebrations. However, if you drink and get behind the wheel after having one too many, and are involved in an accident, it can have an impact on your vehicle insurance, and you might be left  footing the bill.
 
“According to the World Health Organisation (WHO), between twenty and twenty-five thousand people die every year as a result of drunk driving in South Africa. Obviously South Africans should not drink and drive at all, particularly when over the limit, but the statistics reveal many South Africans are ignorant of the dangers and potential financial loss,” says Willem Smith, managing director of Hollard Personal Lines.
 
When you have just a single drink, your chances of causing an accident double, according to www.alcohol.co.za.
 
The Automobile Association (AA) of South Africa believe that new strategies need to be developed to combat alcohol use by road members, as current strategies are not effective.
 
As a guide, if you have had more than one glass of wine or two beers you should not get behind the wheel (the legal limit for alcohol consumption is 0.05g per 100ml). Hollard suggested rather getting a friend or spouse to drive, or taking a taxi.
 
“Despite changes in social attitudes, the rate of positive tests for alcohol in people killed in traffic crashes rose sharply in the first decade of the new millennium. This suggests that many road users are escaping both the enforcement and messaging nets when it comes to alcohol,” revealed the AA.
 
Claiming after a drunk driving incident
 
Natasha Kawulesar, head of client relations at OUTsurance, noted: “At OUTsurance, we exclude cover should a client be involved in an incident where the client was driving under the influence of alcohol. This means that we would not settle the client’s claim for damages to his car and we would also not settle any third party (liability) claim. We would generally continue to insure the client.”
 
Hollard highlighted that if you are found guilty of drunk driving and you were involved in an accident, your insurer might not pay out your claim.
 
“Your car insurance company has the right to refuse to pay out any claim you make if you are found guilty of drunk driving. Because you’ve committed an illegal act by driving under the influence, the car insurance company has no obligation to meet your claim. The same can be said for the Road Accident Fund, which can also refuse to pay out claims for a drunken driving accident. This means that, apart from facing legal action, such drivers would also have to pay the costs of repairing any damage to their own vehicle and could also become personally responsible for a hefty pay-out to others involved in the accident,” explained Hollard.
 
The impact on your insurance
 
In addition to having your claim refused, your insurance company also has the right to refuse to offer you cover at all. “If you’re convicted of drunk driving, your insurance company could decide that you are a high-risk individual, and so they may refuse to continue your car insurance cover. Further, should your driver's license be suspended, you won’t be able to get car insurance anywhere,” said Hollard.
 
Kawulesar added: “We (OUTsurance) advise via our policy documents that we may cancel cover by giving our clients 30 days’ notice. Should there be other aggravating factors such as the client being dishonest about the incident, we may then decide to cancel cover.”
 
If the incident is serious enough that your insurer stops covering you, it may be enough for them to increase your insurance premiums as you are now deemed to be a higher risk. Hollard pointed out that if your insurance company decides to cover your claim, “it’s likely that your car monthly insurance premium will increase fairly significantly. This is because you’re now considered a high-risk driver.”
 
Another option for insurance companies when a driver is found to be under the influence of alcohol or drugs, is to exclude liability, in which case the insurance company may not pay out a claim.
 
“If the driver refuses to submit to any test, including a breathalyser test, to determine the level of alcohol or drugs in his or her blood when requested to do so by the authorities, the insurance company might also not pay out,” revealed Hollard.
 
Honesty is the best policy
 
When it comes to your insurance, it is best to be honest with your insurer about everything when it comes to both life and vehicle cover, as if it is found that you were dishonest about anything, it may be grounds for your insurance company to not pay out a claim.
 
“An insurance policy is one of the main ways in which a risk is transferred from an insured (you) to an Insurer (us), who undertakes to assume the risk in exchange for a premium. Being dishonest, or driving illegally, negates that risk transfer and means that you shoulder all of your risk,” explained Smith.
 
Hayley Taylor, underwriting manager at Hollard Life, pointed out that revealing information about your alcohol consumption to your life insurer is also important, as this can have an effect on your potential health risks.
 
“This includes revealing the amount of alcohol you drink, past habits and any treatment related to alcohol usage, so that the risk can be assessed and the correct rates are applied at the time of underwriting,” noted Taylor.
 
In addition, Taylor revealed: “Regarding life insurance policies, it’s important to note that the standard alcohol-related exclusions on Hollard’s life policy are specific to alcohol-related disease under the gastrointestinal, liver and kidney groups on critical illness.
 
“It is always important to enjoy alcohol responsibly because of the adverse effect over-indulgence can have on your health. While people will always occasionally have one drink too many, it is always better to exercise caution and drink in moderation,” added Taylor.
 
What should you do if you’ve had one too many?
 
“We know that the festive season is almost upon us and it is the perfect time of year to go out celebrating. We urge our OUTsurance clients to make use of Buddy@OUT. Buddy@OUT is an OUTsurance initiative where we – together with Goodfellas – help our clients get home safely after they have enjoyed a few alcoholic drinks and could be under the influence of alcohol. With Buddy@OUT our clients get access to this program at much reduced rates,” said Kawulesar.
 
Furthermore, Kawulesar stated: “The other advice we could provide is that if you are going out in a group, have a designated driver who does not consume alcohol and who can get everyone home safely or else make use of services like Uber.”
 
The AA added: “South Africa's population is extraordinarily diverse in terms of cultures, languages and education levels. Our concern is whether all South Africans have access to information on alcohol and traffic in a form they can both understand and use. Pedestrians in particular have a history of high rates of alcohol use, and further efforts must be made to reach this group.”
 
For more information on how to get a free ride after a night out, click here.