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Non-disclosure and how this may impact your insurance policy

Non-disclosure and how this may impact your insurance policy

By | Individuals | No Comments

Sometimes when adding or changing something to an insurance policy we might try and bend the truth because we think it might get us a lower monthly premium or save a buck here or there, however non-disclosure on an insurance policy could in fact result in a rejection of your claim. In this article we would like to draw your attention to the consequences of not disclosing all material facts at the time of taking out your insurance policy. The following are common points that are often not disclosed, resulting in a claim being deemed invalid.

  • Insurable Interest – A policy holder needs to suffer a financial loss in the event of a claim. If you can prove this then insurable interest usually exists. You cannot insure a friend’s car that is registered in their name that they have lent to you. The correct way would be for the friend (registered owner) to insure it, disclose the fact that you will be the regular driver and pay the premium based on this scenario.
  • Insolvency or judgements – If you have been declared insolvent or have judgements against you, this needs to be disclosed at the time of taking out a policy. If you already have a policy and you are subsequently declared insolvent or a judgement is issued against you, your obligation is to disclose this to your current insurer, failing which you may once again invalidate future claims due to non-disclosure. This is deemed a material change in facts, and as such needs to be disclosed.
  • Regular driver of a vehicle – An insurance premium is calculated based on more than just the age and experience of the regular driver, so it is important to disclose the correct information regarding the driver. Click here to view our previous #BrokerTipTuesday for more information on how insurers determine rates for particular vehicles: https://www.linkedin.com/posts/insurance-zone24_brokertiptuesday-insurancebroker-children-activity-6706448199642566657-ETTt
  • Previous claims – An insurers decision on whether to insure you or not is based on many facts, one of them being the correct disclosure of previous losses or claims. Please note that even if you had a loss and did not claim for it, this needs to be disclosed. Failing to disclose the correct details about previous claims may invalidate any future claims, as it can be argued that had the insurer known about all of your claims they may not have offered to insure you.

These are just a few examples of what you need to be aware of when taking a policy. If you would like to know more, please contact your personal insurance broker for more information.

The most common rejected claims and how to prevent them from happening to you.

The most common rejected claims and how to prevent them from happening to you.

By | Individuals | No Comments

We thought we would highlight some of the common claims that are submitted where claims are either rejected outright, or where partial settlements are made. This article is not intended to point blame at either brokers, Insurers or clients, but simply to highlight the common areas of contention.

These will change from time to time, but these are the four common issues that arise at claims stage.

Underinsurance

Should a client not insure his household contents for the full replacement cost, and then have a claim, be it a power surge damaging their Hi-Fi system or a burglary where they steal a large amount of goods, their claim will be adjusted proportionately to the amount of cover they have selected. A practical example will be as follows: You insure your contents for R 1 million, when in actual fact your proper replacement value is R 2 million. You have a legitimate claim for a total of R 200 000. This is due to the fact that in the above example you have only insured for 50% of the value, you will only be paid out for 50% of your claim. You are therefore liable for R 100 000 of that claim. Please bear in mind that the value of your contents is based on replacement value, and not what you think it’s worth second hand. The same principle will apply for the structure of your home or building. If it is not insured for replacement value you may find that you are underinsured in the event of a claim.

Activation of Alarm systems

Please check your policy to see what conditions have been placed on your cover. It may be that you have an alarm endorsement, which states that your alarm must be linked to a response company and activated when the premises are left unoccupied. There are many instances where clients forget to activate their alarms, and as such invalidate their cover.

Proof of ownership

A condition of cover usually states that in order to settle a claim, an insurer requires proof of ownership for a specific item. This usually applies to high valued items or items that are specified under the all-risk section. Although this is pointed out to the clients at the time of taking out the policy, there are still many instances where a claim is submitted with no proof of ownership. A photo taken of you wearing a Rolex does not constitute as proof of ownership, however the original invoice or a valuation certificate does and will need to be submitted when claiming.

Claims that occur over a period of time

A policy wording states that a claim must be sudden and an unforeseen occurrence, however we receive many claims where a client submits a claim for things such as rising damp, or a wall that has slowly started to lean over due to poor design and build. This happens over a period of time and is not attributed to one defined event. In both of these instances there will be no cover. It is important to remember that an insurance policy is not a maintenance policy, and as such will not respond in those instances.

Learning more about your policy and the conditions of cover will give you the knowledge to make sound decisions and claims on your policy. Your broker is also there to assist you with these circumstances that will make claiming so much easier. Contact your broker today with any questions or queries you have around your policy.

Click here to find out more about submitting various claims with Insurance Zone.

 

The importance of using an insurance broker

The Importance of using an Insurance Broker

By | Individuals | No Comments

In an ever changing world, and with different generations all having different ways in which they prefer doing  business, one thing  hasn’t changed much over the years – and that is the need for good, professional advice.

Unfortunately, over the past few years, in order to position themselves in the market, direct insurers have portrayed Insurance brokers as an expensive link in the chain between client and Insurer. This cannot be further from the truth. It can be said that if you are a client with simple needs, then perhaps a direct insurer is the place for you. But before you decide, perhaps have a look at the benefits and importance of using an insurance broker and see whether the benefits suit your needs.

The benefits of using a broker:

  • With a broker, you get personalised service.
  • An Insurance Broker can save you time and money.
  • They are qualified to analyse your risks and to advise you accordingly.
  • Insurance can be complicated, so a broker is there to assess your situation and shop around for the right insurance product to meet your specific needs. That may mean placing some of your risks with various Insurers to get the best cover possible.
  • Brokers can even, under certain circumstances, arrange insurance cover that has been tailored for your individual needs.
  • Brokers assist you with your claims preparation and claims settlements – they advocate for their clients and ensure that they get the best possible settlement.
  • A broker acts on behalf of the client, not the insurer.
  • Brokers typically have experience on a wide range of products and services across the market which results in the client being presented with comparisons, without having to shop around themselves.

Accountability

In order to advise clients and to sell insurance in South Africa, Insurance brokers are required to register with the Financial Sector Conduct Authority (FSCA), and to remain “Fit and Proper” at all times. This means that brokers are constantly subjected to audits and checks throughout the year to ensure they remain accountable for their actions. Should your chosen broker not perform to the levels you expect, there are various, easily accessible organisations to report them to that will investigate at no cost to you, the customer.

Ongoing advice and support

Our role as your broker does not end once we have arranged your insurance. Apart from being there to assist you when the inevitable happens i.e. at claims stage, a broker also has a role in ensuring that your covers remain relative to your personal situation. Should your needs change your policy needs to be changed accordingly. Your broker will contact you at least once a year to either meet with you or to do a telephonic needs analysis update. It is also their responsibility to bring to your attention any new products that are in the market that may suit your needs.

Should you want to engage with a professional broker, or simply to find out the benefits of using a broker as opposed to dealing direct, then contact Insurance Zone so that we can refer you to one of our authorised brokers in your area.