Zimbabwe eyes overhaul of third-party motor insurance

THE future of third-party motor vehicle insurance in Zimbabwe is set for scrutiny as the Government finalises the proposed Road Accident Fund Bill, amid growing frustration from motorists who say the mandatory cover rarely provides meaningful protection after accidents.

The Ministry of Transport and Infrastructural Development is conducting nationwide public consultations on the Bill, with motorists eager to understand how third-party insurance, long criticised as ineffective, will fit into the new compensation framework for road traffic accidents.

Transport Minister Felix Mhona said the Government is considering channeling part of the funds collected through third-party insurance into the proposed Road Accident Fund, alongside other revenue streams to be identified by the Ministry of Finance. Speaking on a Zimpapers Current Affairs radio programme, Muriro, Minister Mhona stressed that consultations are ongoing and no final position has yet been adopted.

Third-party insurance is a mandatory basic motor policy covering legal liability for bodily injury, death, or property damage caused to other road users. Despite being a legal requirement under the Road Traffic Act, motorists have repeatedly complained that claims are difficult to pursue, often leaving accident victims to shoulder repair and medical costs themselves.

"The third-party insurance has been a topical issue and I do agree with the people of Zimbabwe that it is difficult to claim, but there is still an element of liability that has to be met," Minister Mhona said. "When you are involved in an accident, you often end up engaging other parties to repair your vehicle, yet the money ultimately goes to insurance companies. As we come up with the Bill, we are saying not only third-party insurance will fund the Road Accident Fund. We will also tap into other revenue streams as directed by the Ministry of Finance."

The Minister added that the Government intends to account transparently for how much revenue flows to insurance companies to cover liability and how much can be redirected toward a central accident compensation fund, while ensuring insurers remain viable.

Motorists, however, argue that third-party insurance has become more of a prerequisite for vehicle licensing than a functional safety net, accusing insurers of collecting premiums without providing adequate cover when accidents occur. These concerns echo sentiments raised by Finance Minister Professor Mthuli Ncube in the 2024 National Budget, when he proposed a State-controlled third-party insurance scheme.

Under the proposed arrangement, the State would assume responsibility for underwriting compulsory vehicle liability insurance, currently handled by private insurers. Authorities say the private-sector model often leaves policyholders exposed to additional costs and provides limited benefits. Prof Ncube noted that enforcing third-party liabilities is difficult because private insurers are profit-driven and lack incentive to compensate victims adequately.

The envisaged State-backed scheme would provide broader benefits, including coverage for medical expenses, compensation for injuries, funeral grants in accident-related deaths, and compensation for lost income – benefits not fully covered under the current framework. Currently, private insurers offer three main products: third-party cover, third-party fire and theft (TPFT), and comprehensive insurance. While TPFT and comprehensive policies provide wider protection, they are largely unaffordable for most motorists, leaving third-party insurance as the most common, and most criticised, option.

Meanwhile, Minister Mhona defended the Government's decision to scrap retesting for public service vehicle (PSV) drivers, saying the process had become burdensome and inconsistent with the ease-of-doing-business agenda. Evidence suggests road accidents are more closely linked to mental and behavioural factors than physical retesting.

The Minister added that stakeholders are being consulted on Vehicle Inspectorate Department (VID) reforms, including proposals to reduce its road patrol role and strengthen the Zimbabwe Traffic Safety Council as the lead road safety enforcement agency, subject to public input and legislative approval.

The Road Accident Fund Bill marks a major step in the Government's effort to modernise road safety and accident compensation, promising a more structured and potentially State-backed solution to longstanding concerns over third-party motor insurance.