What You Should Know About Commercial Vehicle Insurance
South Africa’s notoriously dangerous road system poses a myriad of
risks to any business dependent on mobility. Given the enormous financial and
logistical ramifications faced as a result of the loss or theft of a commercial
vehicle, it’s vital that local enterprise owners understand their specific
insurance needs and ensure they have a solution in place that adequately meets
When it comes to commercial vehicle insurance, many insurers offer
standardised packages, along with optional extras, such as Roadside Assistance
and Towing & Recovery.
But not all commercial vehicle operations are created equal - the
roadside assistance needs of a truck owner differ greatly from those of a fleet
owner, and businesses covering shorter distances face significantly less risks
than their long-haul counterparts. As such, it’s important that you understand
what kind of cover your business needs so as to avoid unnecessary excess
payments, stock deterioration and loss of revenue.
Here are a few handy tips to help you pick out the perfect
insurance solution for your operation:
for a flat excess rate
Many insurance companies apply something known as percentage
excess, whereby the first amount payable by a client is often astronomical,
given the high value of the vehicle. In order to make budgeting easier and to
avoid any cash flow crises, rather opt for a flat excess, which makes budgeting
in a time of loss far more manageable.
You never know when an employee might find themselves
incapacitated or unable to work. Rather than losing out on potential business
or risking sending an uninsured driver onto the roads, opt instead for an
insurance option where the individual drivers do not need to be named or
specified on the policy, thus reducing the risk of complications down the line.
Even though your insurance company might pay you out in full in
the event of a vehicle being stolen or written-off, the potential loss of
revenue while you wait can be devastating to your business. As a result, it’s
wise to opt for deposit cover, which allows you to claim a cash amount of up to
10% of a vehicle’s value, thus enabling you to get back on the road far
Like-for-like car hire cover allows you to rent a similar vehicle
and keep your business operational while your claim is assessed and processed
and your vehicle repaired. As an alternative, vehicle-loss-of-use cover pays a
daily allowance towards the rental of a similar commercial vehicle while your
vehicle is being repaired.
If your business endeavours takes the insured vehicle out of the
country from time to time, it’s important to make sure that your insurance
policy covers you in full for any incidents that might take place outside the
country’s borders. It’s also critical that you specify the times of day you’re
planning to be on the roads, as premiums and cover levels differ between day
and night driving.
as you go
If your business operation extends no further than the boundaries
of your immediate metropolitan area, you shouldn’t be paying the same premium
as a fleet owner transporting goods between Johannesburg and Cape Town on a
daily basis. As such, make sure to specify the nature of your commercial
vehicle business, as well as the parameters of its operation, so as to ensure
that you receive a fair premium price.
Transporting perishable goods presents an additional risk for
commercial vehicle owners, as a breakdown or unforeseen incident can compromise
large quantities of stock. As such, it’s always wise to invest in Deterioration
of Stock cover to avoid unnecessary losses. In some instances, it also benefits
you to link the cover of your goods in transit to a specific vehicle, as this
can substantially lower the premiums you pay.
Those little optional add-ons offered by your insurer might seem
unnecessary at the time, but they can have an enormous impact down the line.
Lock and key cover and comprehensive roadside assistance etc. can help you to
manage your risk more effectively by creating less inconvenience in difficult
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