Insuring a leased car or a commercial vehicle

Although car leasing is not very popular in South Africa, it is slowly gaining traction. Less than 10% of consumers in the automotive market are leasing cars. People who lease cars do not own the cars; they simply have a contract to use the car for a particular period and then return it. You should not confuse hire with purchase, although the two are almost similar. In this article, we discuss the importance of a leased or commercial vehicle.

Why do I need insurance for a leased or commercial vehicle

When a person leases a car, he/she they may require you to buy insurance. Some leasing companies make the process easier and automatically include the insurance fee in the leased or commercial vehicle agreement.

The insurance bundled up in the lease agreement is no different from other forms of insurance as it comes with other perks such as roadside assistance.

Ensure a commercial vehicle

leased or commercial vehicleSouth Africa is an economically busy country that heavily relies on the transportation of the manufactured goods and products. They transport these products either domestically or beyond the country’s borders.

You can ensure a range of vehicles

You can insure several types of vehicles with a business policy. These include bakkies (pick-ups), buses, RVs, limousines, tipper trucks, bobcats, trucks, trailers, trucks, etc.

Commercial auto insurance is meant to cover both small and big businesses. It fills the gap not covered by personal auto insurance. Commercial insurance offers the following coverage:

  • Comprehensive truck and trailer insurance
  • Theft and hijack
  • Windscreen damage
  • Fire and explosion
  • Motor third party liability
  • Passenger liability
  • Goods in transit liability
  • Van and truck hire
  • Fuel loss
  • Cover outside of South Africa
  • Accidental damage
  • Uninsured motorist coverage
  • Comprehensive physical damage coverage against floods, fire, hailstorm, etc.

Benefits if you insure your car

Some insurance companies like Miway offer companies or entrepreneurs benefits for insuring their trucks with them. These benefits include towing & recover, keys & remotes and roadside assistance.

You can insure more than one driver on a commercial auto policy. The three groups of drivers that can be included in the policy are:

Single regular driver

This is an individual driver who drives the car on a daily basis and drives the vehicle more often than any person in a given period.

Multiple named drivers

These are five known individuals who regularly drive the vehicle

Pool driver

This allows any authorised and licensed person to drive the vehicle.

As expected, commercial auto insurance premiums are higher than those of personal auto insurance. The following factors determine the premiums levied on commercial policyholders:

Experience and driving records of a business’s drivers

Companies are urged to employ qualified, skilled, experienced and older drivers to reduce accident risks and premium rates.

Driving routes and distance

Companies that drive longer routes and to places considered to be high risk are charged higher premiums because of the increased risk of accidents and theft.

Policy structure

If a business ensures all its vehicles under one policy, it will get a discount and save on premiums.

Value of the vehicles insured

Expensive vehicles like limousines and luxury buses cost higher premiums to insure.

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All info was correct at time of publishing January 12, 2019