Government to run third party motor vehicle insurance scheme: Ncube

BULAWAYO – The government will take over the running of third party motor vehicle insurance with effect from April 2024, finance minister Mthuli Ncube announced in his budget speech on Thursday.

Ncube said motorists were finding that insurance companies “have no motivation to compensate” for losses incurred because they were “profit oriented,” and now the government was stepping in.

He told MPs: “Third party insurance for the private and public motor vehicles was established under the Road Traffic Act in order to cushion against losses through road accidents and property damages.

“Road traffic accidents are now ranked as the most prevalent cause of deaths and injuries across the globe.

“Whilst insurance is an appropriate mechanism to cover liability costs, it has, however, proved difficult to enforce third party liabilities since private insurers are profit oriented, hence, have no motivation to compensate for the losses incurred.

“In that regard, I propose that the government assumes third party motor vehicle insurance to private and public motor vehicles as is the case with other countries in the region.”

Every vehicle on the road is required by law to have insurance, and the most common is the third party scheme which is a form of liability insurance that the owner of a vehicle purchases for protection against the claims of a third party in the event of an accident.

Ncube did not say anything about comprehensive insurance cover, the more expensive scheme which not only covers third party liabilities but also the insurance holder’s vehicle.

The minister said the prescribed compensation limits provided through the Road Traffic Act are not adequate as they are restricted to death, permanent disability, medical and funeral expenses.

“I, therefore, propose to broaden the scope of third-party insurance cover under the Third-Party Motor Vehicle Scheme to include the following: medical benefits; rehabilitation; injury grants; funeral grants and loss of income.

“The scheme will be operational with effect from April 1, 2024.”