Tourism Insurance Part 4

Summary: Part 1 in this series covered an introduction to insurance, an outline on the EC Directive, the basics of risk management, and financial guarantees. Parts 2 and 3 looked at liability insurance.
Part 4 continues the subject of liability with specific reference to the Road Accident Fund in South Africa.

TYPES OF INSURANCE

The five kinds of insurance that apply to the tourism industry are:

1. Financial Guarantee (Insurance Bond) –  See Part 1 HERE.
2. Liability Insurance – See Part 2 HERE.
3. General Public Liability – See Part 2.
4. Passenger Liability – See Part 3 HERE.
5. Road Accident Fund Amendment Bill – Covered in Part 4 below
6. Vehicle / Property Insurance
7. Travel Insurance / Medical Rescue
8. Other Business Insurance (Buy & Sell, Key Person, Provident Fund)

ROAD ACCIDENT FUND – SOUTH AFRICA

What is the Road Accident Fund?

The Road Accident Fund is a public entity, which has been set up to pay compensation to people injured in road accidents or the dependants of people killed in road accidents arising from the negligent driving of a motor vehicle in South Africa.

Where does the Fund get its money from?

The Fund gets its money from a fuel levy included in the price of petrol and diesel, which is paid by drivers of motor vehicles.

Is a lawyer required?

The Fund employs staff at all regional offices and at various public hospitals to assist claimants free of charge. However a claimant may still decide to employ a lawyer. The lawyer will be entitled to charge a fee for professional services rendered.

The time period to make a claim

If the identity of the offending driver or owner is known, the claim must be lodged within three years from the date on which the claim arose. (This does not apply to a claim of a minor). If the identity of the offending driver or owner is unknown, the claim must be lodged within two years from the date on which the claim arose.

Who is entitled to make a claim?

1. A person who was personally injured (except a driver who was the sole cause of the accident).
2. A dependant of a deceased victim.
3. A close relative of the deceased in respect of funeral expenses.
4. A claimant under the age of 18 years must be assisted by a parent or legal guardian.

What can you claim for?

• Medical expenses (past and future);
• Funeral expenses;
• Loss of earnings or income if person is disabled (past and future)
• Loss of support for a dependant of a deceased victim (past and future)
• General damages for pain, suffering and disfigurement in the case of bodily injury. Note: (This is determined after examining the extent and severity of the injury).

How is a claim made against the Fund?

• A claim must be made on the Claim Form (Form 1 is to be used in respect of claims arising prior to 01 August 2008, and RAF1 for 01 August 2008 onwards) which is available from offices of the Road Accident Fund.
• Every applicable paragraph must be fully completed.
• The doctor that treated the injured person immediately after the accident must complete the medical report section in the claim form.
• The claim form must be signed by the claimant.

What documents must be submitted with the claim form?

In the case of injury the following documents must be attached:

1. A certified copy of the identity document of the claimant;
2. An affidavit by the claimant;
3. The Police report (OAR), police statements and police sketch plan;
4. Documents to prove loss of earnings e.g. salary advice slip;
5. Documents to prove medical expenses;
6. Copies of hospital records if available;
7. A serious injury assessment report (in respect of claims arising after the 31 July 2008) where general damages are claimed.
   If the accident victim is deceased the following additional documents are required:
8. Identity document of deceased;
9. Death certificate or post mortem report;
10. Documentary proof of marriage (if claimed by spouse);
11. Full unabridged birth certificates reflecting the names of parents;
12. Proof of earnings of all parties involved;
13. Proof of reasonable funeral expenses.
14. The claim form and the accompanying documents must be hand delivered or sent by registered mail to the Fund at the addresses appearing under the Contact Details at www.raf.co.za

Important considerations:

• Property damage cannot be claimed from the Fund, it may be claimed from the offending driver;
• An accident must be reported to the police and the Fund by the driver/owner;
• Compensation will be reduced in relation to claimant’s own negligence;
• Compensation for a passenger in the offending vehicle is limited to R25 000 in respect of claims arising prior to 01 August 2008.
• Compensation received from the Compensation Commissioner in a case where a person is injured on duty, is deductible.
• The Fund may require a person to submit to investigations and medical examinations;
• A claim may be excluded in a case where a claimant unreasonably refuses or fails to cooperate with the Fund in the course of its investigation.
• There are certain categories of claims that the Road Accident Fund Act excludes.

The Road Accident Fund Amendment Act, No19 of 2005, which came into effect on the 1 August 2008 brought about the following changes to claims arising after 31 July 2008:

• The limit of R25 000.00 placed on the claim of a passenger in the offending vehicle, has been removed.
• General damages claims are subject to an assessment by a registered medical practitioner, to determine the severity of the injuries suffered and whether or not the injury is to be classified as a “serious injury “
• Damages for loss of support are capped at R160 000.00 per year in respect of each deceased breadwinner.
• Damages for loss of income are capped at R160 00.00 per year.
• The maximum amount upon which claims for loss of income and loss of support are calculated (R160 000.00) is subject to a quarterly inflationary adjustment.
• Emergency medical treatment costs are payable by the Fund in accordance with a prescribed tariffs. (NHRPL tariff)
• Non-Emergency medical treatment costs are payable by the Fund in accordance with the Uniform Patient Fee Schedule for full paying patients
• The exclusion of claims by members of the same household as the driver of the motor vehicle has been removed, and such claims are now permissible.
• The exclusion of claims by fare-paying motorcycle passengers has been removed, and such claims are now permissible.

It is important to note the effect that the Road Accident Fund legislation has on the tourism industry in terms of legal action following a motor vehicle accident.

NB: The abolition of the injured party’s (passenger/tourist/guest) common law right to sue the wrongdoer (operator), means that following a motor vehicle accident the severely injured tourist will only receive limited compensation from the Road Accident Fund and will have no right of recourse against the wrongdoer.

As South Africa’s primary inbound markets emanate from European Union countries and are subject to the E.C. Directive on Travel and Trade Act, agents will find themselves even more exposed to risk. If an injured guest’s damages cannot be recovered against the local operator, their client will no doubt seek to hold them responsible in terms of the said directive.

Read more in this series:

• Understanding Tourism Trade Insurance Part 1
• Understanding Tourism Trade Insurance Part 2
• Understanding Tourism Trade Insurance Part 3
• Understanding Tourism Trade Insurance Part 4
• Understanding Tourism Trade Insurance Part 5
• Understanding Tourism Trade Insurance Part 6
• Understanding Tourism Trade Insurance Part 7