Road accident fund rethink
South Africa is one of the very few countries with a high level of sophisticated private vehicle ownership, but no mandatory insurance requirement.
Vehicle assets require insurance as a condition of the financing house ' s agreement, but the government does not require South African vehicle owners or drivers to have third-party insurance. Buyers who aren ' t financing their vehicles don ' t need insurance, which makes the South African private vehicle fleet very different in its risk and accountability profile from many other global car markets of similar size.
Public liability for causing a vehicle collision that materially alters someone ' s quality of life is covered by the Road Accident Fund( RAF). An entity funded by a generous allocation within the South African fuel levy.
It ' s not working
Actuaries, road safety engineers and data specialists have long warned that South Africa ' s RAF system is untenable. There are very good reasons why countries like the United States and Australia don ' t have a state liability insurer for all road users.
South Africa ' s underinsured vehicle sector is disastrous. The RAF ' s liabilities are crushing and only increasing. These annuity-based future medical expenses to support those injured in road accidents should not be the responsibility of the state and, by implication, the South African taxpayer.
Road accident costs for personal injury should be absorbed and mediated by the insurance industry. The market should be the gatekeeper of risk. South Africa has a highly developed insurance sector, with proven liquidity.
Privatise the public risk
The latest policy intervention by the Ministry of Transport might be to levy an additional licence fee to help fund the enormous RAF liabilities. Minister Barbara Creecy has said that her department is currently researching a vehicle owners ' contribution scheme to fund the RAF. But this is simply an attempt to avoid the issue.
South Africa ' s large unroadworthy and uninsured vehicle fleet poses an operational risk, and trying to extract an additional road tax levy from legal vehicle owners and operators won ' t address this.
Trying to extract more RAF funding from legal vehicle owners ignores the risk that uninsured fleets pose to the automotive aftermarket. When legally insured vehicles are impacted by uninsured vehicles, it can place a burden on the repair industry due to delayed claims processing.
South Africa does not need more RAF funding through additional stealth taxes on the fuel price. Or an RAF funding levy engineered into the vehicle licensing system. What it needs is a simple mandate for compulsory third-party insurance, as in most other global markets with high levels of vehicle ownership.
WORDS IN ACTION 48 JUNE 2026