In the modern society, an extremely important source of compensation for loss is that which is provided by insurance coverage.
Liability assurance (i.e. insurance cover in respect of liability to pay compensation to others) serves well the primary purpose of the law of delict which is to ensure that compensation is paid to injured persons, insofar as insurance cover assures the victim ofactual compensation instead of merely obtaining an empty verdict against D who might well not have the financial means to pay damages.
As regards motor accidents, it should be noted that in terms of Part IV of the Road Traffic Act [Chapter 13:11], it is compulsory for users of motor vehicles to be insured against third party risks. “Act only” or “minimum third party insurance” covers only physical injuries to third parties.Passengers being carried for reward in the D’s vehicle are covered up to a specified financial limit.
If the required Road Traffic Act insurance coverage has not been taken out, the Motor Insurers’ Bureau, in terms of an agreement with the Minister of Roads and Road Traffic entered into in 1962, may still pay compensation to the injured party from a fund established for this purpose. A number of formalities have to be complied with before such compensation will be payable.