Road Schmuccident Fund

A man is out for a ride on his motor bike when a car coming from the opposite direction moves onto the wrong side of the road and smacks him, amputating his right leg. He fl ies through the air and slams into the roof of the car with his shoulder, losing his right arm. The driver of the car does not stop. He is tracked down and eventually pays a R500 admission of guilt. He has destroyed someone’s life and their body and their family, and yet he gets away with a R500 slap on the wrist. Six years later the Road Accident Fund finally pays out to the victim. Sound familiar? Many of our readers have suffered a similar fate, so why is this accident making the news?The rider of the bike in question was Joachim Schoss, a billionaire business man from Switzerland and he has just received a R500 million payout from the South African Road Accident Fund. Many of you will be congratulating Joachim and his lawyer on their victory, convinced that if the accident had happened anywhere else he would have received an even bigger payout, but you would be wrong. Other countries have caps on their insurance payouts and whenever you travel overseas you have to buy insurance for any unforeseen accidents.46,5 cents of the cost of each litre of petrol goes to the Road Accident fund, approximately R700 million rand per month or 8.4 billion rand per year, but with over 11,000 road accidents per year, and uncapped claim limits, the RAF is bankrupt. How can you go bankrupt when you get so much into the coffers every month?Jacob Modise was called in three years ago to sort out the fund but despite The RAF Amendment Act being signed by the President in 2005, many sections were never enacted due to legal wrangling and injured parties continued to make enormous claims. Within days of the Schoss payout the RAF Amendment Act became law (1 August 2008) and is available for you to view on the RAF website I was concerned about the new R160,000 cap; it’s not much, especially if you convert it to pounds or dollars. Most families spend about R4000 a month on petrol. That means they are paying roughly R180 a month to the RAF. What could you get for R180 a month if you “went private”. I only managed to find one policy for R120 per month that pays out roughly the same as RAF, but it is a once off payment, nothing next year or the year after for ongoing medical expenses. So, it turns out that RAF’s offer of R160,000 is not so absurd after all. Remember, their responsibility is to all the occupants of the innocent car and the passengers of the guilty driver. And RAF’s responsibility continues for many years after the accident.What policies did I find? Outsurance offers a nifty little insurance; for R10pm you obtain R25,000 in accident cover for the policy holder. It won’t make you rich, but every penny helps when accidents happen. And it is so easy to get cover. You just phone them and ask them to add it to your existing Outsurance policy.

Budget’s offering is slightly more expensive but the pros outweigh the cons! Their Personal Accident Policy includes death / disability cover and, so important, hospital cover that commences on the 1st day of hospitalization and continues for up to 2 years!
They offer 3 different options:


  Cost pm
Per Person
Hospital Cover
Per Day
Plan A R30 R 50 000 R100
Plan B R60 R150 000 R150
Plan C R70 R250 000 R200

With the state of the RAF, and the changes they have just made to the Act, the burden of coping after an accident is going to fall heavily on our own shoulders. Read Jerry’s article and buy some accident insurance!

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