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Motor Insurance
Sunday, April 1, 2007
Question of reward

Private motorists should check their insurance policies if they are planning to join a car-pool. They should to make sure they are covered in the event of injury or damage to the vehicle in situations where passengers are being carried, especially for reward.

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.
“Offering a lift to a friend or colleague is often the socially responsible thing to do,” says Mr Isaacs. “But the consumer should not assume his motor insurance cover is fully 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.
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 is redefined as ‘commercial’, where additional may be necessary.
“All consumers are well advised to consult their short-term insurance adviser if they are uncertain about the distinction between commercial and private use or do not know precisely what covers are in place on their policy.

Copyright © Insurance Times and Investments® Vol:20.3 1st April, 2007
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