Third Party Insurance Claims: Who's Liable?

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Monday, 10 August 2009 09:18

Unlike the US and Australia, third party or liability car insurance is not compulsory in South Africa, but can save you from a costly mistake. Liability cover is a type of car insurance purchased by the insured (first party) from an insurer (second party) for claims made by someone else involved in an accident (third party). The compensation is paid out to third parties, or those who suffer loss or injury but did not cause an accident. Under liability cover though, you are responsible for damages to your vehicle even when an accident is caused by a third party.

According to South African law, the person responsible for an accident is legally liable for the death, injuries or damage of third parties and their property. You can be legally forced to pay for this liability, even without car insurance, which can cost you tens of thousands in damages. Third party car insurance or liability insurance covers this cost, without it third parties can sue you in a private capacity to cover the costs of damages to their property.

The Road Accident Fund covers some liability
In South Africa though, the legal liability for death or injuries is covered by the Road Accident Fund which all drivers contribute to as part of the fuel levy calculated into the price of our petrol. Since August 2008 third parties are prohibited from claiming for damages pertaining to injury or death from the guilty party. The Road Accident Fund claims the liability of the guilty driver. This however does not exclude the driver from covering the costs of damages to property such as the third party’s vehicle.

Being legally forced to cover this liability in a personal capacity can be financially crippling. While third party car insurance or liability cover may not be compulsory it certainly is indispensable.

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