So what does the AARTO Bill mean for insurers?

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The Administrative Adjudication of Road Traffic Offences (AARTO) Bill imposes strict penalties on motorists – but what are the ramifications for insurers?

There are quite a few, Hollard’s head of legal, Danny Joffe, tells FAnews.

One major concern is that AARTO will have little effect on driver behaviour, and dealing with the big issues: speeding, reckless and negligent driving, and drunk-driving.

“Unfortunately, insurers see the results of these issues. The total lack of respect for the rules of the road has become a real issue. There is a feeling that offenders will not get caught. And even if they are caught, leniency will be applied in a lot of instances,” Joffe is quoted as saying.

But that’s not the only problem: drivers whose licences are suspended become a bad risk for insurers. While insurers already check for traffic-related convictions and licence suspensions, it may become more difficult for defaulting motorists to buy insurance – and they will likely have to pay higher premiums.

“It all depends on how consistently the Act is enforced,” Joffe says.

Acquiring insurance cover once a licence suspension is lifted may also be difficult – and will likely depend on what the driver’s transgressions were.

“If it’s for a collection of small speeding or parking fines, I assume it will be very different to other violations such as driving under the influence or driving recklessly (overtaking on blind rises or solid lines or skipping a robot or stop street). It will depend on the violation,” Joffe states.

Those motorists who have to retake their licence tests will not have cover until they are once again licensed. But the fact that their licences had been suspended will be seen by underwriters as material to the cover offered.

“Again, it will depend on how consistently the system is applied.

PWG Advisory Services (Pty) Ltd FSP nr. 44152 and PWG Short Term Advisors (Pty) Ltd FSP nr. 44153 are authorised financial services providers. © 2021 PWG Group. All Rights Reserved. Powered by Creative Joggie