Festive season claims that could ramp up your car insurance premiums

The high death tolls and accident rates over the past month may have an effect on insurance premiums and motorists could soon be paying more, particularly if they’ve had an accident during the festive season.

Will Keevy head of Insurance Busters added, the increase in accidents together with the floods as well as the recent fires will have an impact on annual insurance premium increases during the year.

The margin of impact or influence on these premiums Keevy said is still undetermined at this stage.

Another contributing factor is the rising death toll rate, as this plays a role and affects insurers who specifically offer life insurance products, Keevy added.

But some insurers are denying that December and January’s road accidents and deaths will have a measurable impact. “Our short term insurance premiums are based on claims cost of all the claim types we cover. Vehicle accidents resulting in road deaths form a very small part of our total claims and are therefore not a powerful predictor of the cost of car insurance. Our car insurance premiums are not affected by the stats released by any department on festive season road deaths,” stated Natasha Kawulesar from Outsurance.

Hollard insurance, similarly echoed, “It is very important to understand that, when comparing the number of fatalities with insured motor losses that the two may not show a strong correlation.” This, they attributed to the fact that many accidents involve cars that are not insured. “Only about a third of the vehicles on SA’s roads are insured,” highlighted Marvin Tshezi, head of claims.   

“Having said that, all information pertaining to motor vehicle accidents has some kind of a bearing on car insurance premiums. However, December’s information would not yet have been processed in its entirety as many claims incidents have yet to be reported, many of our clients have been away on holiday, and many panel beaters have only just re-opened, meaning that in many cases we do not yet have accurate information as to the severity of claims that have been reported,” Tshezi added.

Road statistic report outcomes

In yesterday’s announcement by Transport Minister Dipuo Peters of the 2016 festive season road statistics, fatalities increased by 5% compared to the previous year and there were a record 1,714 deaths on the road for the period between 1 December 2016 and 9 January 2017.

“On the surface, this increase may appear to be nominal, but the reality is that the number is neither stabilising nor, more importantly, coming down. More concerning is that the Department of Transport, and the Minister, are saying the same things this year as they did last year, and the situation is not getting any better,” stated the Automobile Association (AA).

“This increase in road deaths over the festive period is cause for great concern and points to the lack of a proper road safety strategy to deal with the carnage,” added the AA.

The AA further expressed concern that the preliminary figures announced today may increase, as they did last year, further adding to the number of deaths. “What is particularly dismaying about the 2017 numbers is the steep increase in the number of passengers who died. Passengers accounted for 40% of deaths this year, along with 34% pedestrians, and 24% drivers.”

Another highlighted area of concern was that the number of vehicles that were reportedly stopped, and fined, were higher than usual. According to the AA: ”This should be standard procedure and not limited to special times of the year, such as festive holiday seasons. The Association noted that these cars could have been stopped and many removed from the roads months ago, and that a more impressive figure would have been if drivers had been stopped for moving violations such as reckless and negligent driving.”

The Democratic Alliance (DA) were similarly concerned with the statistics brought forward today, as they remarked, “It is clear from these very concerning figures that something is seriously wrong with the approach being adopted by government.”

The opposition party were clear about their plan going forward in addressing these figures.

“This business as usual approach to more than 50 deaths on our roads a day simply isn’t working, and we can’t continue with the status quo approach any longer. The DA will accordingly request that the Portfolio Committee on Transport place at the top of its agenda the increase in road deaths in 2016, with the aim of investigating the efficiency and effectiveness of government’s plan to deal with this matter,” affirmed the DA.

They also have plans of submitting a series of written questions in the National Assembly to probe whether all the Department's pledges, made following the release of the 2015 road deaths figures, were fully implemented in 2016 and to what degree. ”This will include determining whether the 2016 campaign was adapted at all, and on the basis of what evidence,” the DA concluded.

The Department of Transport, however, remain confident in their approach and strategy. The announcement also shook quite a few tail feathers as Peters announced that she was aiming to reclassify drunk driving as a serious offense in the category of crimes like murder and rape.

Handy tip: In the event of an accident you could be seen having to fork out more than you can afford. In light of this it is always advisable to enlist car insurance. Should you not have car insurance or are looking to change providers, why not apply through Justmoney today.