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The price of petrol keeps shooting up and peak time traffic is a nightmare. So it makes sense to try carpooling to save money, combat the boredom of being stuck in traffic and decrease your carbon footprint. After all, less cars on the road equals less pollution. What’s more, with apps such as CarTrip and Ugomyway helping you to share a ride with people who are travelling the same way as you are, you can offset some of your running costs. It is however important to understand the effect this can have on your car insurance, so here’s what to know and what to watch out for.
Types of carpooling
Before you hang up your car keys, 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 cover and payouts. 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 get a 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. You would then potentially need business insurance, or a special permit if you transport children or more than 12 people at a time.
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.
Ensure you have insurance good and proper
If you are the owner of a carpool vehicle, it’s a good idea to relook your insurance cover - for useful extras such as roadside assistance, tyre and rim cover, or windscreen protection.
Speak to your intermediary or contact us on 0860 444 444 if you have any questions about comprehensive car insurance. Remember: if you’re an existing Santam client, you can add policies and make any changes on the Santam client portal.
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