News

South Africans are using carpools and lift clubs to beat record petrol prices – but it will impact your insurance


With the increase in the fuel price now breaking through R20 a litre, and increasing peak traffic times, it makes sense to try carpooling to save money.

However, it’s a good idea to let your insurer know if anything changes in your regular driving set-up as this can affect insurance cover and payouts, says insurance company Santam.

“For example, if the designated driver of your car is not the ‘regular driver’ quoted in your insurance policy documents, and is involved in an accident, your claim may be rejected.

“If money changes hands, things can get more complicated too. It could be seen by an insurer as a commercial transaction, especially if the money you’re receiving is more than what is necessary to cover petrol, maintenance, parking etc.”

In this case, you would then potentially need business insurance, or a special permit if you transport children or more than 12 people at a time, Santam said.

“Insurers have different definitions of what defines a ‘lift club’. In the case of Santam, where two or more people who each own their own vehicle, all travel together in one vehicle and they take it in turns to each use their own vehicle and there is no other consideration of any sort, this can be termed a lift club,” the group said.

Below it outlined some of the most popular carpooling setups right now:

  • Specific driver carpool: In this case, there will be a designated driver and car, and passengers pay a weekly/monthly rate towards things like petrol, parking and maintenance. It is recommended that this amount should not exceed the SARS Reimbursement Travel Allowance, i.e. no profit is made. Passengers should also know that they will be unable to claim from you for bodily injury in the event of an accident but will have to claim from the Road Accident Fund.
  • Alternating carpool: Here everyone takes turns to drive with their own cars on a daily, weekly or monthly basis. So simply put: when you drive, you pay. When you ride, it’s free. In this case, no money is exchanged, and each driver is responsible for their own insurance and maintenance costs. Passengers should know that they will be unable to claim from you for bodily injury in the event of an accident but will have to claim from the Road Accident Fund.
  • Side hustle carpool: With apps like Carpool, you could use your car to earn some cash on an upcoming trip, accepting cash from strangers to share a ride with you. It is recommended that this amount should not exceed the SARS Reimbursement Travel Allowance, i.e. no profit is made. Passengers should also know that they will be unable to claim from you for bodily injury in the event of an accident but will have to claim from the Road Accident Fund.
  • Employer carpool: Some employers offer staff the use of company vehicles to encourage carpooling. Employees would then pay a fare to cover petrol, insurance, and maintenance costs.

Read: These are the cars you can afford with your salary in South Africa



Source link

Leave a Reply

Your email address will not be published.

close