Before You Start a Carpool Read This

A little reminder to avoid awkward chats with your insurance…

It’s only June and we have already experienced three petrol price increases, with the Automobile Association quoted as warning of another increase next month. It’s no wonder many of us are trying to decrease our transport costs by getting creative about how we get around. Carpooling in an appealing option – but although it helps lighten the load in one way, it might not sit as well with your insurance.

Why carpooling is a great idea

Of course you will at some point be stuck in confined space with your workmate who just cannot stop singing and dancing to the latest pop track, but you will also be collaborating to reduce the amount of carbon emissions, which help reduce your overall carbon footprint. This is something we should all be actively working towards.

How carpooling impacts your motor insurance

Carpooling can take place where each member of the lift clubs shares the travel burden, by alternating drivers. This is perfectly fine, but the problem comes in when one person is the designated driver and is then compensated for petrol by the rest of the lift club members.

This involves passengers travelling in a vehicle that is not registered or licensed for commuting purposes. Hippo.co.za explains that that exchange of money could potentially be seen by an insurer as a commercial transaction, particularly if the money covers more than just the operating costs.

What does that mean for anyone who wants to carpool?

Some insurers will consider whether the amount of money changing hands was only sufficient to cover petrol, rather than to earn an income, but it is best to contact your insurer directly and find out first. It’s also important to remember, if you’re using your car for anything other than personal use, it is essential to update your insurance policy in order to avoid your insurance claim being rejected.