When you take a look at the alarming statistics on traffic accidents, you will appreciate the need for car insurance almost immediately. Not only does a traffic accident cause injury and loss to the driver, it also causes irreparable harm to third parties -pedestrians or other road users.
Traffic accident compensation exists for the sole purpose of placing a person in the position he/she would have been in had the accident not occurred.
The law requires every motor vehicle owner to be in possession of valid motor vehicle insurance. Now, when you cause injury, loss or damage to another, the ensuing compensation is paid out of the relevant road accident fund without you forking out a single cent.
However, there are specific instances when a road accident fund commits itself to paying out money to injured third parties. For example: bodily injuries, loss of support on account of the death of a breadwinner, as well as prospective loss on account of loss of income or earning capacity, are mostly covered by your car insurer.
