A recent online survey of approximately 200 respondents, conducted by MUA Insurance Acceptances, provided some interesting insight into what South Africans think should be taken into consideration when motor insurance premiums are calculated.
When asked whether gender should be used as a rating factor for motor insurance premiums, an average of 62.8% of respondents said no. Male respondents were considerably more averse to gender as a motor insurance premium determinant, with 68.8% of men saying this should definitely not be considered, compared to only 58.4% of women.
These results are interesting, given the 2009 Road Traffic Report from the Road Traffic Management Corporation (RTMC), which revealed that 92.5% of driver fatalities reported during 2009 were males and only 7.5% females.
Young drivers should pay higher premiums
Age is another controversial topic when it comes to calculating motor insurance premiums, with younger drivers usually paying higher premiums due to typically higher accident rates for this age group. The survey mirrored this trend with 75.3% of respondents saying that age should be a determining factor when calculating motor insurance premiums. Both genders indicated strong feelings towards this with 77.4% of men and 73.3% of women saying yes.
Various studies have found that younger drivers are also more likely to be involved and injured in a fatal road accident compared to older, more experienced drivers. The 2009 Road Traffic Report statistics back this up with 11.3% of fatal accidents involving persons between the ages of 20 to 24 and 13.4% of drivers between the ages of 25 to 29, meaning that people between the ages of 20 to 29 are involved in nearly a quarter of all fatal road accidents in South Africa.
Third-party insurance should be complusory
A resounding 94.3% of respondents said South Africa should impose compulsory third-party insurance - a clear indication that South African drivers realise the benefits that such an initiative will bring, not only as a method of reducing motor insurance premiums, but also as a much-needed step for the country as a whole. Compulsory third-party motor insurance will also ensure an element of stability for the motor insurance industry by allowing more repairs to be carried out, with the result that more of the vehicles on the road will be in an acceptable and roadworthy condition.
While the industry and the government are currently working together to try implement this initiative, there are still many uncertainties, such as how the project will be funded and what organisation would be responsible for the maintenance of the system. However, these statistics reveal that it is much needed and long awaited.
When asked whether drivers should go for a retest on their drivers licence every five years, 73.1% of respondents were adamant this should not be required with 77.2% of females and 69.8% of males saying no.
While currently no countries require a road retest when it comes drivers licence renewals, the UK has a two-year probation period that stipulates that should new drivers obtain a total of six or more penalty points (acquired when breaking any rules of the road) during this period they are required to reapply for their drivers licence and take the test again. Such an initiative could prove beneficial to South Africa with such a high rate of young driver fatalities.
Penalise those who lose their licences
Most respondents felt that motorists who have had their licences taken away and given back after completing their driving ban should be penalised with higher motor insurance with 75.2% responding yes. Females were more adamant that these drivers should pay for the consequences of their previous bad driving behaviour with 79.2% saying it is necessary compared to 70.9% of males.
Drivers who have had their drivers licence suspended may find it difficult to find a motor insurance company willing to take on the risk to insure them, given their past violations. Those drivers who are lucky enough to find an insurer will often find they face higher motor insurance premiums. This penalty serves to promote responsible and safe driving behaviour and is a crucial measure to be considered in reducing the number of fatal motor accidents on the roads.
While the results of this survey provide a good indication of what local motorists believe should be considered when calculating motor premiums, changes in technology that place further emphasis on individual driver behaviour could change the way that the industry determines premiums in the future, resulting in the insurance industry becoming an interesting space to watch.
LEGAL DISCLAIMER: This Message Board accepts no liability of legal consequences that arise from the Message Boards (e.g. defamation, slander, or other such crimes). All posted messages are the sole property of their respective authors. The maintainer does retain the right to remove any message posts for whatever reasons. People that post messages to this forum are not to libel/slander nor in any other way depict a company, entity, individual(s), or service in a false light; should they do so, the legal consequences are theirs alone. Bizcommunity.com will disclose authors' IP addresses to authorities if compelled to do so by a court of law.