Carpooling can save fuel, but read this first: If you’re part of a lifting club, your insurer needs to know this to make sure there’s no problem when you want to claim compensation for an accident.
Many people are returning to the office just in time to be hit by high fuel prices, making the trip to work more expensive.
An elevator club or car pool could be the answer to save on fuel costs while reducing your carbon footprint, and there are even apps for that.
Consumers now pay more than 21 rupees per liter for gasoline, which makes even short business trips expensive, and with all the other prices expected to rise, fuel economy can help consumers plug holes in the budget of anyone.
What is carpooling?
Insurers consider an arrangement whereby two or more people, both car owners, take turns to travel to work together for no pay such as car pooling or lift clubs.
However, it’s not just about making arrangements with colleagues and picking them up at seven the next morning.
Marius Steyn, Santam’s underwriting manager, says it’s important to know the terms and conditions that could affect your insurance coverage so you don’t run the risk of coverage shortfalls or deny the insurer’s claim altogether. .
Different types of carpooling
Steyn says the first thing to do is determine what type of carpool you want to set up:
- Driver-specific carpool, with designated driver and cars where passengers pay a weekly or monthly fee for gasoline, parking and maintenance.
- Alternating car pool, where everyone, in turn, drives their car on a daily, weekly or monthly basis. In this case, no money changes hands because you pay when you drive and when you drive, it’s free. Each driver is responsible for their own insurance and maintenance costs.
- Side hustle carpool, when you use your car to earn some money on upcoming trips by accepting cash from strangers to share a ride with you. Again, your goal shouldn’t be to make a profit.
- Employer Carpooling where your employer offers the use of company vehicles to encourage carpooling. Employees pay a fee to cover the costs of gasoline, insurance, and maintenance.
Why your insurer should know
The insurance implications for all of these options are that your passengers should also know that they cannot claim from you for injury if you are involved in an accident, but must apply to the Traffic Accident Fund.
Steyn says it’s important to let your insurer know if anything changes in your normal driving setup, as this can impact your insurance excesses and payments. For example, if you are not the designated driver of your car, but use it more, it could have a negative impact on your claim due to additional deductibles or premiums.
If the money changes hands, your insurer may consider it a business transaction, especially if the money received is more than needed to cover gasoline, maintenance and parking.
You may potentially need company insurance or a special permit if you are carrying children or more than 12 people at a time.
There could also be tax implications if you make a profit and therefore the amount must not exceed the travel allowance for the reimbursement of the SARS.