11/08/2007 17:27 - (SA)
Claims at risk if car is used for business
STAFF REPORTER
AN INSURANCE claim may be repudiated should you fail to disclose that the car is used for business purposes.
Santam spokesperson Lourens Joubert said it does not matter what kind of business a person does. If the insured car is sometimes used for business purposes such information should be furnished to the insurer.
Whether you are starting a business, a working mother who is starting small home industry or an estate agent, as soon as the car is used for business purposes the insurer needs to be informed.
Joubert said after updating the information you can still retain your personal or non-commercial policy by simply adding extra cover.
However, he recommends fully-fledged commercial cover depending on how much you use the car.
“When an insured vehicle is used for work-related projects in addition to the usual use it means the driver is clocking up more kilometres.
“The driver is also spending more time on the road as a result of congested traffic and they may be vulnerable to road accidents,” he said.
When submitting a claim, the frequency of business use and the type of business are taken into account.
The insurers would also need to verify if the person who was driving the car was an employee, as employees are not covered under the standard commercial motor policy.
Joubert said the compensation commissioner is responsible for such compensation under the Compensation for Occupational Injuries and Diseases Act (Coida).
However, should the accident occur before or after working hours, outside the scope of their employment, the commercial motor policy would only approve the claim if the insured party is legally liable for the accident.
Coida will also grant compensation to employees who are provided with free transport to and from work by their employers, provided that the vehicle is driven by the employer or one of their employees.
“An employee is obliged to first lodge a claim for compensation in terms of Coida.
“He or she may later approach the Road Accident Fund (RAF) for any further compensation.
“The RAF will only pay out over and above the Coida payment, not in addition to it,” said Joubert.
Passenger liability cover for private vehicles or vehicles with a carrying capacity of less than 1 500kg, is usually included under the standard commercial motor policy.
Owners of vehicles falling outside this description can purchase passenger liability cover for an additional premium.
Joubert said car owners should always remember that it is important to transfer personal policies to commercial policies as soon as they enter into a business venture.
“Consult a broker or call an insurer directly to advise you on the best policy that will suit your needs,” said Joubert.
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