Heavy penalties meant to discourage drivers from using their cellphones while driving should eventually translate into cheaper premiums for all motorists, says Helen Szemerei, CEO of IntegriSure, a specialist insurance company.

A new by-law that gives authorities the right to confiscate cellphones being used by motorists while driving was officially introduced in Cape Town earlier this week. The by-law is part of the city’s drive to reduce road deaths.

Motorists who are caught using a cellphone without a hands-free kit will have their cellphones confiscated for 24 hours and would be required to pay a R500 fine for their first offence, which could increase to R2000 for further offences.

"This (by-law) is likely to result in fewer claims being paid due to a decrease in the number of accidents. Fewer claims mean a larger pool of premium funds and should therefore result in a subsequent relief in motor insurance premiums," said Ms Szemerei.

She also called on national traffic authorities to roll out this legislation throughout the country in order to bring down the number of road-related accidents.

"Cape Town has had a lot of success in reducing the number of road-related deaths and it is crucial that the success of this new initiative is monitored to determine whether it should become a national law," Ms Szemerei said.

Rene Otto, CEO of MiWay, one of SA’s latest entrants into the direct financial services and insurance industry, also said yesterday the new by-law was likely to result in a reduction of the number of road accidents, thus subsequently reducing the number of claims.

Cape Town mayor Patricia de Lille said this week that it would take at least two years before the effectiveness of the cellphone by-law could be assessed.

Jean-Pierre Smith, safety and security member of the mayoral committee, said Cape Town was the only city where the road death toll was decreasing steadily, from 1739 deaths in 2008 to 1321 last year.