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The Office of the Ombudsman for Short-term Insurance has seen a 34 percent
rise in complaints from policyholders in 2003 — partly due to problems
where claims are not paid because insurers say incorrect information was
supplied.
Many people are shocked when making a claim to find they are not covered,
says Steffen Gilbert, CE of Santam, the country’s largest short-term
insurer.
Gilbert says that more often than not it’s because consumers don't stick
to the rules when providing relevant information at the outset. He said
that in general insurers want to prevent their clients from being
frustrated and don't want them to have to complain to the ombudsman.
Gilbert shares some tips to help policyholders get the best from their
insurance.
Do’s and Don’ts
Don't inflate a claim and don't falsify
Insurance fraud in South Africa amounts to between R1-billion and R3-billion a year and push up premiums by between five percent and 15 percent worldwide. Fraud also leads to criminal prosecution and difficulties in getting future cover.
Make sure all material facts are disclosed
The insurer trusts the information is correct and calculates an
appropriate premium based on it. If a person fails to disclose information
or doesn't give the correct information, the insurer may reject the claim.
Don't insure your child's car in your name
Parents who attempt to reduce the cost of insurance by insuring the car
(which is registered in the child's name) on their policy, are acting
fraudulently. The insurance must be in the child's name, even if the
parents pay the premium.
Disclose all previous claims
Policyholders must disclose all previous claims to the insurer. If the
policyholder doesn't, his policy could be declared null and void. This
happens regularly, and the reality usually only hits policyholders when
they've incurred a loss and want to submit a claim.
Get a valid driver's licence
By law, a valid driver's license is required before a person may drive a
motor vehicle. If a policyholder gives someone without the necessary
driver's license permission to drive the vehicle, cover may be refused.
Take due care
All insurance contracts stipulate that a policyholder must take the
necessary care. He must take the steps necessary to prevent loss or damage
by, for example, by not leaving the keys in the car or leaving valuables
lying on the seat of the car. He must also have his car serviced regularly
to help prevent an accident.
Don't drink and drive
An insurer will reject a claim if it is found that the driver exceeded the
legal blood alcohol level and this gave rise to the accident. It is also
against the law to drive under the influence of alcohol.
Ensure security requirements are in place
To enjoy cover, the necessary security requirements must be in place. If
the policy stipulates that the car must have an immobiliser or a tracking
device installed, the insurer will not pay out the claim if this hasn't
been done. The necessary proof of installation must also be sent to the
insurer. In some cases the insurer will also require that the car's
tracking system be activated before your client will enjoy cover.
Pay premiums when they are due
Don't take chances. Pay premiums when they are due. If an insurer sends a
notice stating that a policy will lapse on a certain date, they will not
be covered after that date unless they renew the policy and pays the
required premium.
Ensure your vehicle is roadworthy
If your policyholder drives a car with smooth tyres and this leads to an
accident, the insurer is unlikely to pay out the claim. It's the
policyholder’s responsibility to make sure the car's tyres are in a good
condition.
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