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Category:
Insurance
News /
Short Term
Insurance /
Mutual &
Federal
/ Jan. '07
Check your policy for vehicle-sharing
cover
You don’t want to be checking the
details after an accident has happened.
Private motorists joining car-pools
should double-check their insurance policies to make sure they are
covered in the event of injury or damage to the vehicle in
situations where multiple passengers are being carried.
This
consumer education tip comes from Mutual & Federal, one of South
Africa’s leading short-term insurers and a product innovator that
includes vehicle-sharing provisions in its Allsure policy.
However, product structures differ
across the insurance industry and definitions may change in various
product ranges, says Sedick Isaacs, General Manager, Personal
Business at Mutual & Federal.
Car-pool arrangements have come under
the spotlight following the high-occupancy vehicle lane experiment
on the N1 between Johannesburg and Pretoria. Under the Department of
Transport and Gauteng Metro Police initiative to ease congestion,
the right hand lane was reserved for the exclusive use of vehicles
carrying a minimum of three occupants.
Mutual & Federal applauds efforts to
ease congestion and reduce the incidence of accidents; factors that
contribute to a continual rise in repair cost pressures on the
insurer’s book of motor business.
“Offering a lift to a friend or
colleague is often the socially responsible thing to do,” says
Sedick Isaacs. “But the consumer should not simply assume that motor
insurance cover is in place. Check your policy wording. You may be
covered for carrying passengers, but depending on the insurer and
their specific product, you might not.”
Mutual & Federal (Allsure policy)
allows vehicle-sharing for social purposes and the giving of lifts.
This includes commuting, but the ‘use’ section of its policy makes a
distinction between private and commercial usage.
The cover remains valid when the driver
is reimbursed to cover petrol and costs, but if the payment includes
a profit element, the vehicle usage has changed from ‘personal’ to
‘commercial’. Additional commercial cover may be necessary.
In practical terms, this means private
individuals can co-operate to share their motoring costs and reduce
congestion, but as soon as they try to make a profit, they need
commercial cover for their vehicles.
Isaacs adds: “All consumers are well
advised to consult their short-term insurance adviser if they are
unsure about the distinction between commercial and private use or
do not know precisely what covers are in place on their motor
insurance.
“You don’t want to be checking the
details after an accident has happened. Put your mind at rest now;
especially as the holiday period will soon be upon us, traditionally
a period when the road toll mounts.”
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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