Fuel prices seem to be on a steep, upward curve and car prices and the cost of maintaining a vehicle can be taxing on a tight budget. This is why some commuters are expected to turn to car pooling for their transport needs, says Aon insurance brokers spokesperson Mandy Barrett.

She says these "lift clubs" are real solutions that are practical and bring significant cost savings. However, there are also insurance implications for car pool commuters.

"Motoring costs are a big part of household budgets and they will become even more so in the future so anything that can be done to offset them, including lift clubs, is sound economic sense.

"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.  

Barret say that critical aspect for car pooling is determining whether the driver of a vehicle in such a club is driving for reward. Commuters sharing the cost of petrol would not be considered a driving for reward and in this case, "passenger liability cover may be excluded under their personal motor insurance policies".

"The driver in this instance 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.

"Having such cover in place would protect you against claims in a worst case scenario where passengers you were transporting were injured in an accident. It's all to do with the purpose of providing the transportation and if that purpose is for profit, even indirectly.

Barret says there is risk that there could be "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.  

Drivers need to 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 potential situation 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," Barret says.