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Travel Insurance
Monday, December 1, 2008
Travel twist

The amendments to the Road Accident Fund (RAF) introduced in August this year are both good and bad news  for tour operators,  says Mark Bush, deputy business unit manager at Alexander Forbes Risk Services. “The bad news is that the amendments to the Act significantly reduce a passenger's claim against the Road Accident Fund following a motor accident.”
For example since the amendments:
• Loss of income claims are restricted to R160,000 per annum
• Similarly loss of support claims are restricted to R160 000 per annum
• Medical expenses claims are based on public health tariffs, while
• Claims for the likes of disfigurement, pain and suffering, disablement and loss of amenities of life will only apply in a case of 'serious injuries'.

What this means is that both foreign and local tourists will have to ensure they arrange adequate personal accident cover for themselves and their families whilst travelling in South Africa as they can no longer rely on adequate compensation from the Road Accident Fund.
The good news is that the Act abolishes the passenger's right to claim against the driver of the vehicle that caused the accident or the employer of the driver.  “This restriction goes to the heart of the risk faced by vehicle owners and operators of game drive vehicles, tour buses, passenger transfer vehicles, and the like,” says Bush.
As a result at least the cost of passenger liability insurance should reduce markedly. “Nevertheless vehicle operators should maintain their existing passenger liability cover and, in addition, consider buying personal accident cover on behalf of passengers.”
The new restrictions will only apply to motor vehicle accidents which occur in South Africa; so be aware that neighbouring territories have different legislation.
Maybe many of our neighbouring countries will adopt similar legislation, but for moment it is important for vehicle operators to maintain their current passenger liability cover, especially if they are taking guests to neighbouring countries.
Secondly, while the amendment applies to all passengers, both local and foreign, if the South African tour operator or its parent company has assets overseas, a foreign tourist could circumvent these recent amendments to the RAF Act by and institute a claim on the South African operators’ overseas assets.
 

Copyright © Insurance Times and Investments® Vol:21.11 1st December, 2008
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