The 40% Gap: Why Goods-in-Transit Cover Fails Exactly When You Need It

The number that should keep fleet owners awake

The average South African fleet operator is underinsured on goods-in-transit by roughly 40%. That is not a rounding error. It means that when a loaded truck is hijacked on the N3 between Durban and Johannesburg — the single most predictable loss event in South African logistics — the policy pays out less than half the cargo value, and the business absorbs the rest.

The gap is almost never the result of a decision. Nobody sits in a boardroom and resolves to underinsure their cargo by 40%. The gap forms silently, over years, through a mechanism so mundane that nobody notices it happening.

How the gap forms

Your GIT limit was set on the day your policy was first placed. It reflected the cargo values, the contract mix, and the routes your fleet ran at that time. Then three things changed — and the limit did not.

Cargo values inflated. The goods on your trucks today are worth materially more than the goods on your trucks five years ago. Electronics, fuel, agricultural inputs, FMCG — every category has repriced. Your limit hasn’t.

Your contract mix shifted. The client you won two years ago ships higher-value loads than the client you lost. Your maximum exposure per trip moved. Nobody told your policy.

Your routes extended. Work that once ended at the border now crosses it. If your cross-border extension doesn’t name every country your fleet actually enters — Mozambique, Zimbabwe, Zambia, Namibia — the cover simply stops at the fence.

The claim-day arithmetic

Take a truck carrying R2.4 million of cargo, hijacked outside Mooi River. The GIT limit, set four years ago, is R1.2 million. There is a hijacking sub-limit of R750,000 that nobody flagged at renewal. The assessor applies the sub-limit. The business recovers R750,000 against a R2.4 million loss — and then discovers its business interruption cover does not respond to logistics downtime, so the six weeks of disrupted contracts that follow are absorbed too.

Every element of that scenario is common. Together they are the difference between an insured loss and a financial event the business remembers for a decade.

Why the renewal process doesn’t catch it

The standard renewal is a pricing exercise, not an audit. The broker requests terms on the expiring basis, the insurer offers them with an adjustment, and the schedule rolls forward — limits, sub-limits, wordings and all. The process is designed to renew the policy, not to test it. A limit set in 2022 can travel untouched into 2026 without a single person having asked whether it still matches a single load your fleet carries.

What testing the limit actually looks like

Calibrating GIT cover is not complicated. It requires your actual maximum cargo values per trip, per contract, per route — this year’s, not inception year’s. It requires reading the hijacking and theft sub-limits against those values. It requires listing the countries your trucks entered in the last twelve months and checking them against the cross-border clause. And it requires asking what happens to revenue when vehicles are off the road, and whether anything in the programme responds.

That exercise takes days, not months. The fact that it is so rarely done is not a technical problem. It is a structural one: nobody in the standard renewal chain is paid to find the gap.

We are. It is the entire premise of our free policy audit — and goods-in-transit is where we find the largest gaps, most often.