By Bianca Mahere, Associate.

Insurance is the concept of safeguarding property or life against risk. It is a contract between the insurer and the insured and the parties both mitigate loss by spreading it. The insurer’s role is to provide security against an identified risk whilst in exchange, the insured pays premiums.

In Zimbabwe, the primary statute which governs insurance is the Insurance Act [Chapter 24:07]. Other statutes include the Road Traffic Act [Chapter 18:11], Insurance Regulations, Consumer Contract Act and Pensions Commissions Act amongst others.

Insurance is a contract which is entered into voluntarily, however, in Zimbabwe, compulsory insurance is called for by the law with regards to third party insurance. Third party insurance is covered by Part IV and V of the Road Traffic Act [Chapter 18:11].It is mandatory and also a requirement in order to obtain motor vehicle licence from the Zimbabwe National Roads Administration (Zinara).Strictly speaking, a motor vehicle is not allowed on the road without this insurance cover.

The purpose is to cover liability to a third party who has suffered bodily injury, death or damage through the fault of the motor vehicle or trailer owner. It is interesting to note that third party insurance does not cover the insured strictly but third parties who are affected by the conduct of the insured. Third party insurance was introduced as a result of the difficulties that wronged parties experienced in claiming compensation from the parties at fault. It is now much easier to approach the motor vehicle owner’s insurer and receive compensation. The insurer must be a registered institution in terms of the Act.

There are several drawbacks arising from third party insurance. Firstly, the cover does not include contractual liability or any consequential damages arising from the loss. The insurer will also compensate the third party to the extent of the amount agreed upon in the insurance contract. Therefore, a third party may need to claim the remaining amount of his claim or consequential damages from the vehicle owner directly. The third party is also disadvantaged in that he or she has a period of two years to claim from the insurer after which the claim will prescribe. Therefore, there is need to act expeditiously in order to be compensated.

The Road Traffic Act also covers third party insurance for motor vehicles travelling through Zimbabwe. There is what is called yellow card insurance which covers motor vehicles and trailers passing through Zimbabwe for a certain number of days.

Despite some drawbacks noted above, the compulsory third party insurance is commendable and protects the general public against loss or damage as compensation is guaranteed.

Should you require any further information on the above please do not hesitate to contact us.

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