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.
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.