The financial risk South Africans rarely plan for after a road accident
One serious road accident can erase years of financial security.
A household may have savings, investments and medical aid, but it may also have a bond, school fees and a lifestyle that depends on a steady income.
If an injury makes it difficult or impossible to work, pressing financial questions follow: How will we meet our commitments? How will we look after the people who depend on us?
This can happen at any income level. Financial resources may provide a buyer, but they do not eliminate the financial consequences of lost earnings, prolonged rehabilitation or ongoing care.
The risk is also not limited to drivers, as passengers, cyclists and pedestrians use South Africa’s roads every day.
Where another driver’s negligence causes injury, a person may qualify to claim from the Road Accident Fund (RAF).
A settlement can address losses such as medical expenses and loss of earnings. Yet the amount awarded is only part of the financial picture.
Claimants should also consider how much of the settlement they will ultimately retain and how long it may need to last.
What does it cost to claim?
Under a lawful contingency fee agreement, a legal practitioner may charge a success fee if a claim succeeds, subject to the limits in the Contingency Fees Act which Is up to 25% of the settlement.
However many other additional costs and expenses are also deducted resulting in up to 40% of the settlement not going to the entitled claimant.
In some cases, the total fees and expenses associated with a claim can significantly reduce the amount a claimant ultimately receives and is legally entitled to.
On a R1 million settlement, for example, deductions of fees and expenses of 40% would leave the claimant with R600,000.
For a household already dealing with reduced income or ongoing care needs, that is a substantial difference.
Before signing an agreement, claimants should understand exactly how fees are calculated, what expenses may be deducted and how much of any eventual settlement they can expect to retain.
A RAF settlement is not a windfall
A RAF settlement may need to replace income, fund the rehabilitation process and support a family for years.
Even a substantial lump sum can be depleted quickly when immediate needs take priority over longer-term financial planning.
This makes the claims process itself an important consideration.
Managing the claim from start to settlement
RoadCover manages qualifying RAF claims for its members from start to finish, including the documentation, evidence, legal requirements and expert appointments involved in the process with no fees or expenses deducted and 100% of the RAF settlement paid to the member.
Ultimately, anyone injured in a motor vehicle accident in South Africa is legally entitled to claim from the RAF, provided they meet the statutory requirements.
This is because the RAF is funded through the fuel levy, with a portion (R2,25) of the levy on every litre of fuel sold in South Africa contributing to the fund.
RoadCover is a claims-management membership service, not an insurer, and does not determine whether the RAF will accept a claim or how much it will award.
RoadCover’s legal team has worked with RAF claims for 21 years and understands how the process and the system needs to be managed to pursue the best possible settlement, whilst ensuring that all of the compensation remains with the claimant and ultimately stays within the members economy resulting in a net positive effect for South Africans.
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