The Amended Act seeks to ensure the solvency and sustainability of the Road Accident Fund by reducing the number of eligible claims, capping the limits on claims for medical expenses, claims for loss of support and loss of income.
Only road accident victims with ‘serious injuries' (defined as an injury which results in 30% or more of total body impairment) are eligible to claim from the RAF. Amendments to the Act, which have been in place since 1942, specifically exclude claims for general damages (non-pecuniary) which include damages for pain and suffering, disablement, disfigurement and loss of amenities.
Another group of people who are now precluded from claiming from the RAF are ‘secondary' victims. Under the previous RAF law a person who suffered trauma as a result of witnessing an accident could claim damages. Such claims are now excluded.
‘But one of the more far reaching aspects of the amendments is that accident victims' right to claim damages from the negligent driver, or employer of a negligent driver through the civil courts has been removed,' says Dodds
‘This effectively shifts the onus of responsibility of ensuring that there is adequate personal accident insurance cover, disability insurance, life insurance and health insurance onto the individual.
‘I would suggest that employers take this into consideration in the process of reviewing group life policies and that individuals make an appointment with a financial advisor to review insurance policies in place,' he said.
Dodds explained that in terms of the new legislation, medical expenses will be paid as and when they are incurred, (as opposed to once-off award in anticipation of future expenses) and in terms of the tariff for health services provided in the public sector.
It is very difficult to compare tariffs in the public sector with tariffs in the private sector as different coding systems are used. However the facility fee for an emergency procedure in a public hospital costs R175.00 (UPFS 2008) while the same in a public hospital is charged at R372.00. The facility fee of a day procedure in a public hospital is charged at R345.00 while the facility fee in a private hospital is charged at R991.00.
‘Road accident victims are thus exposed to being out of pocket in a number of ways; their claims may not be eligible for payment at all or they may be capped according to the public sector tariff. In terms of the Act, loss of earnings will be capped at R160 000 per year. If a person earns more than this, they have to self-insure,' he said.
* Ian Dodds (CFP) is Managing Director of Fundamental Investments. He has 32 years' experience in the industry and be contacted by emailing firstname.lastname@example.org
Issued by: Popcorn Consulting
On behalf of: Fundamental Investments
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