South Africa’s New AARTO Demerit System Could Leave Millions of Drivers Without Car Insurance

• South Africa’s roads are among the most uninsured in the world, with nearly 70% of vehicles carrying no cover at all
• The new AARTO demerit system could push even more drivers off the road legally, making the uninsured crisis significantly worse
• Insurance experts warn that drivers who lose their licences under AARTO will automatically lose their car insurance cover too

South Africa’s new AARTO demerit system, rolling out from 1 July 2026, is about to make the country’s already dangerous roads even riskier. Insurance and legal experts are raising the alarm as millions of motorists remain unaware of what losing a licence will actually cost them.

The system, administered by the Road Traffic Infringement Agency, assigns demerit points to drivers for traffic offences. Accumulate 15 points and your licence gets suspended. That suspension immediately voids your car insurance policy.

What happens when your licence goes

According to reports, nearly 70% of vehicles on South African roads currently carry no insurance at all. That figure alone means the average driver faces a two-in-three chance of hitting an uninsured motorist. Legal experts at Van Deventer Dowlath & Marx Inc say AARTO could push that number even higher.

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Associate Director Tanya De Villiers explained the chain reaction clearly. A driver loses their licence under AARTO. Their insurer is notified. The policy is cancelled. The driver, now unlicensed and uninsured, stays on the road anyway.

De Villiers used a simple example to show how subrogation protects insured drivers today. A reckless driver causes R50,000 in damage to your car. You pay a R5,000 excess. Your insurer pays the remaining R45,000 and then pursues the at-fault driver for that money. Once recovered, your excess comes back to you.

That system works only when the at-fault driver has traceable legal and financial standing. An unlicensed, uninsured driver leaves the insurer, and ultimately the policyholder, carrying the loss.

South Africa records more than 2,000 road accidents every single day. Traffic accidents cost the country roughly R180 billion per year. De Villiers warned that without subrogation functioning as intended, insurance companies would be forced to raise premiums sharply just to survive.

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Under AARTO, some of the harshest point penalties include six points for driving unlicensed, six points for reckless or drunk driving, and five points for driving 30 km/h or more over the speed limit. Running a red light costs two to three points depending on the vehicle class.

Drivers can recover one point every three months by driving cleanly and paying fines on time. However, reaching 15 points triggers a three-month suspension per excess point. A third suspension results in permanent licence cancellation.

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More stories involving SA licensing

• South African TV licence holders are facing a new risk as a deceptive email phishing scam spreads nationwide.
• A man shared a proud moment after his girlfriend successfully passed her driver’s license test, highlighting the effort and patience it took to get there.
• South Africa's Road Traffic Management Corporation is planning to replace physical vehicle licence discs with an electronic system that uses number plate recognition technology.

Source: Briefly News