Benefits of carpooling are far reaching, but there are pitfalls you must know about.
Image: Ian Landsberg/Independent Newspapers
By Marius Kemp
South Africa’s roads are some of the most congested globally. According to the 2024 INRIX Global Traffic Scorecard, which analyses transportation data and trends among 946 urban areas across the globe, residents in Cape Town lost a staggering 94 hours per year owing to traffic.
This makes it the seventh most traffic-congested city in the world. Add to this the high cost of petrol, and the case for carpooling to save money looks increasingly attractive.
Apart from combatting the boredom of being stuck in traffic and decreasing your carbon footprint, apps such as JustGo and Ugomyway help you to share a ride with people who are travelling the same way as you are so you can offset some of your running costs.
Benefits of carpooling are far reaching, but there are pitfalls you must know about.
It is important to understand the impact carpooling can have on your car insurance and what to watch out for:
Types of carpooling
Before you go any further, you need to decide which carpooling setup works best for you:
What can affect your insurance?
Whichever carpooling scenario you choose, it’s a good idea to let your insurer know if anything changes in your regular driving set-up as this can affect insurance premiums. 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 influenced in terms of the cover and premium applicable.
If money changes hands, things 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 expenses such as petrol, maintenance, and parking. You would then potentially need business insurance, and a special permit if you transport children or more than 12 people at a time.
Additionally, insurers have different definitions of what defines a “lift club”. In the case of Santam, one of the vehicle exclusions denotes that carrying of passengers for hire or passengers who pay a fare are excluded, except in the case of vehicle sharing to conserve fuel.
If you are the owner of a carpool vehicle, it’s imperative to ensure you have comprehensive insurance from a reputable provider. It’s also a good idea to speak to your broker or insurer about relooking your insurance cover for useful extras such as roadside assistance, tyre and rim cover, or windscreen protection.”
Kemp is head of personal underwriting at Santam.
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