The state of consumer finances in South Africa has deteriorated in the second quarter of 2022. This is according to the Momentum-UNISA Consumer Financial Vulnerability Index (CFVI), which indicates that consumer finances dipped back into a very exposed state. And Johan van Tonder, an economist at Momentum, has speculated that this prominent decline could well be attributed to steep rises in the prices of fuel and food products, load shedding, increasing interest rates and low economic growth.
Against this backdrop, the popularity of Car Pooling to work has increased significantly. However, consumers are strongly advised to carefully check the terms of their vehicle insurance to ensure that they don’t receive a nasty surprise when claiming from their insurer.
Most of us loathe having to make that call or send that email, for fear of having to pay even more than we do for insurance cover. But in an all-too-often scenario that is increasingly being referred to attorneys, some clients prefer to avoid checking with their insurer in the hope that they won’t have an incident which causes loss or damage.
If Murphy’s Law strikes though, you will have painted yourself into a corner, and many then misrepresent facts to their insurers, hoping they don’t get caught out. Insurers are skilled at validating facts and information when claims are submitted – and they should be, to protect the pool of insured consumers they cover. If you are found to have lied to your insurer, not only will your claim likely not be paid, but your policy may be cancelled by your insurer – you will have to disclose this to any other insurer you approach for cover. Insurers generally are not likely to provide cover to you if your policy was cancelled by another insurer in these circumstances.
It’s always best to make that call and keep your insurer informed. Rather pay a little more in premium now and have the peace of mind that you will have coverage when it’s needed.
As to the manner of carpooling, avoid doing it for profit as far as possible, because this changes the risk, the premium and other conditions of cover significantly. The extent of your liability to those you transport will also be greater.
By George Herbst
Insurance Law Expert
