- South Africa's roads are among the most uninsured in the world, with approximately 70% of vehicles having no cover
- The new AARTO demerit system could drive even more drivers off the road legally, making the uninsured crisis significantly worse
- Insurance experts have warned that drivers who lose their license under AARTO will automatically lose their car insurance cover too
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South Africa's new AARTO demerit system, which comes into effect from 1 July 2026, is set to make the country's already dangerous roads even riskier. Insurance and legal experts are raising concerns as millions of motorists are unaware of how much they would actually lose if they lose their license.
The system, administered by the Road Traffic Violations Agency, awards demerit points to drivers for traffic offences. Accumulate 15 points and your license will be suspended. That suspension immediately cancels your car insurance policy.
What happens when your license goes away
According to reports, approximately 70% of vehicles on South African roads currently have no insurance. That figure alone means the average driver faces a two in three chance of hitting an uninsured motorist. Legal experts at Van Deventer Dollath & Marks Inc. say AARTO could push that number even higher.
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Associate Director Tanya De Villiers explained the chain reaction clearly. Under AARTO a driver loses his license. Their insurer is informed. The policy has been cancelled. The driver, now unlicensed and uninsured, remains on the road anyway.
De Villiers used a simple example to show how subrogation protects insured drivers today. A careless driver causes damage worth Rs 50,000 to your car. You pay an additional R5,000. Your insurer pays the remaining R45,000 and then pursues the at-fault driver for that money. Once recovered, your extra comes back to you.
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That system only works if the at-fault driver has a traceable legal and financial standing. An unlicensed, uninsured driver leaves the insurer and ultimately the policyholder incurring losses.
South Africa More than 2,000 road accidents are recorded every day. The country suffers a loss of about Rs 180 billion every year due to traffic accidents. De Villiers warned that if things did not work out as intended, insurance companies would be forced to raise premiums sharply to survive.
Under ARTOSome of the harshest penalties include six points for driving without a license, six points for careless or drunk driving and five points for driving 30 km/h or more than the speed limit. Running a red light costs two to three points, depending on the class of the vehicle.
Drivers can earn one point every three months by driving cleanly and paying fines on time. However, reaching 15 points triggers a three-month suspension per additional point. A third suspension results in permanent license revocation.
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Source: News in Brief