As South Africa’s e-hailing industry grows rapidly, drivers who fail to insure their vehicles correctly for commercial use could face severe financial and legal consequences, industry experts warn.
Francois Smit, general manager of investigations at Miway Insurance Limited, notes that the country’s e-hailing sector now includes an estimated 150,000 drivers. Many operate part-time, supplementing their income through platforms like Uber and Bolt, while others rely on e-hailing as their primary livelihood.
A concerning trend has emerged, with some drivers using personal vehicle insurance instead of commercial coverage to save on premiums. While this may appear cost-effective in the short term, the risks can be substantial.
“If a vehicle is being used for e-hailing and this is not disclosed to the insurer, any claim—whether related to an accident, theft, or third-party injury—may be rejected outright due to misrepresentation,” Smit explains.
Ann Cloete, from insurance brokerage and risk advisory firm Aon South Africa, emphasizes the hidden liabilities of driving commercially without proper coverage. “Many vehicle owners may not realize that using their personal vehicles for commercial purposes exposes them to significant financial and legal risks,” she says.
Smit adds that misrepresentation occurs when a policyholder provides false, incomplete, or misleading information to an insurer at any stage—policy inception, renewal, or claim. This means even drivers who initially insured their vehicles for personal use face risks if they later engage in e-hailing without informing their insurer.
Once a vehicle transports fare-paying passengers, its insurance risk profile changes dramatically. “The vehicle is no longer just for private or general business use—it is now exposed to the higher risks of commercial passenger transport,” Smit notes.
A common misconception is that standard business-use vehicle insurance automatically covers e-hailing. “The moment a driver accepts a ride through an e-hailing platform, the vehicle operates commercially. Standard business policies do not automatically extend to this use,” Smit explains.
Cloete advises drivers to consult with brokers to ensure the cost of coverage aligns with their risk. “Insurance solutions can include variable excesses depending on the driver’s needs. Coverage is tied to your risk profile, so responsible driving is critical,” she says.
Beyond individual drivers, brokers also carry responsibility. “Proceeding with personal insurance while aware the client intends to use the vehicle commercially exposes both parties to unnecessary risk,” Smit warns.
Ultimately, full disclosure is key. “Drivers must inform their insurer exactly how their vehicle is used. While commercial cover may be slightly more expensive upfront, it provides essential protection if something goes wrong,” Smit concludes.
