“Nightmarish” insurance risk posed by toll road inspired lift clubs
Insurance brokers Glenrand M.I.B. have issued an advisory that lift clubs, sparked off by rising motoring costs and the shock toll road tariffs proposals, are a potential insurance nightmare.
Among the reasons for a likely increase in lift club numbers, the company cites two recent petrol prices adjustments and the expectation that, with oil prices on the rise, possibly accompanied by a further weakening of the Rand exchange rate, there could be further increases, while motoring costs including insurance rates are on the increase as insurance policy renewal season arrives.
Moreover, with dozens of toll gates planned across Gauteng's freeways from June, motoring costs in the province in particular are under pressure and the temptation to join a lift club to commute to work and schools is seductive the company points out in a statement.
And therein lies major insurance risk says Mandy Barrett, Glenrand M.I.B’s Manager Marketing and Sales Personal Product Solutions.
“Looking at the Gauteng scenario in particular, the implications of the toll roads for motoring costs are clearly significant with various organisations warning that the toll fees proposed by the SA National Roads Agency Limited (Sanral) would be crippling.
“The further expansion of the Gautrain rapid rail service between Johannesburg and Tshwane, when it opens, will no doubt help matters, although at a cost, but there’s speculation that lift clubs will nonetheless mushroom as commuters look for cheaper transport alternatives.
“The key risk aspect in this scenario is whether the driver of a vehicle in such a club is driving for reward, i.e. charging passengers and we urge the motoring public to exercise caution, as in this case, passenger liability cover may be excluded under their personal motor insurance policies.
“The driver in this scenario needs to register under Chapter 6 of the Road Traffic Act as a taxi operator, subject to all the rules and regulations of that legislation, including holding a professional driving permit and with commercial passenger liability cover in place.
“As the driver in a lift scenario without such cover in place, you could be open to crippling claims if your passengers were to be injured due to your negligence. It’s all to do with the purpose of providing the transportation and if that purpose is for profit, even indirectly.
“Take a worst case scenario where, say, half a dozen people are injured in an accident while you were transporting them. You could be faced with multiple claims running into millions of Rands for everything from pain and suffering to loss of future earnings and the claimants could sue you in your personal capacity.
“It would also be advisable not to breach other legislation. For example, have a Professional Driving Permit in addition to a taxi licence where this is required.
“On the other hand, just as drivers should be clear on where they stand in terms of insurance cover for transporting passengers, passengers in lift clubs should establish whether the driver to whom they entrust themselves, is indeed properly covered to avoid a potentially scenario where they are injured or worse and there is no insurance cover in place, possibly resulting in long drawn out legal battles with no certainty about the outcome.”
