Carpooling can save fuel but read this first: if you are part of a lift club, your insurer needs to know to ensure there are no problems when you want to claim for an accident.
Many people are now returning to the office, just in time to be slapped with high fuel prices making it more expensive to travel to work.
A lift club or car pooling could be the answer to save on fuel costs while also reducing your carbon footprint and there are even apps for this.
Consumers are now paying more than R21 per litre for petrol, which makes even short trips to work expensive, and with all other prices also expected to increase, saving on fuel can help consumers to plug holes in anybody’s budget.
What is carpooling?
Insurers consider an arrangement, where two or more people, who both own cars, take turns to travel to work together without any payment as a car pool or lift club.
However, it is not simply a question of making arrangements with your colleagues and picking them up at seven the next morning.
Marius Steyn, underwriting manager at Santam, says it is important to know the terms and conditions that could affect your insurance cover so that you do not run the risk of cover shortfalls or your insurer denying your claim altogether.
Different kinds of carpooling
Steyn says the first thing to do is establish which kind of carpool you want to set up:
- Specific driver carpool, with a designated driver and car where passengers pay a weekly or monthly rate for petrol, parking and maintenance.
- Alternating carpool, where everyone takes turns to drive with their own cars on a daily, weekly or monthly basis. In this case, no money changes hands because you pay when you drive and when you ride, it is 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 aim should not be to make a profit.
- Employer carpool where your employer offers the use of a company vehicles to encourage carpooling. Employees pay a fare to cover petrol, insurance and maintenance costs.
Why your insurer should know
The insurance implications for all these options are that your passengers should also know that they cannot claim from you for injuries if you are involved in an accident but must claim from the Road Accident Fund.
Steyn says it is important to let your insurer know if anything changes in your regular driving set-up, as this can affect insurance claim excesses and pay outs. If you are, for example, not the designated driver of your car, but use the car the most, it could have a negative impact on your claim due to additional excesses or premiums.
If money changes hands your insurer can consider it a commercial transaction, especially if the money receive is more than what is necessary to cover petrol, maintenance and parking.
You could potentially need business insurance, or a special permit if you transport children or more than 12 people at a time.
There could be tax implications as well if you make a profit and therefore the amount should not exceed the Sars Reimbursement Travel Allowance.