What everybody should know about their policies ...
Speak Insurance Like An Expert
How Well Do You Know Your Policy?
As a Policyholder, you should have an understanding of some basic principles of insurance:
Utmost good faith
Insurance is based on utmost good faith. When you enter into a contract with an Insurer, you’re asking the Insurer to assume responsibility for many of the risks we face in daily life. The Insurer knows nothing about you so your premium will be determined based on your risk profile.
This is where utmost faith comes in.
Full disclosure
In assessing your risk profile, the Insurer relies on you to make full disclosure of all material information. That’s why it’s vitally important for you to be completely honest when entering into an insurance contract and to maintain this honesty throughout your relationship with the Insurer. Otherwise, when you need to claim, the Insurer may say: “But you didn’t disclose this information and therefore we couldn’t assess your risk profile correctly.” The consequences of material non-disclosure at application stage is that your policy becomes ‘voidable’, resulting in you having no cover when it comes apparent that you weren’t as honest as you should’ve been. Also bear in mind that Insurers often share information.
Insurable interest
You can’t insure something in which you don’t have a financial interest. If you own something, you have ‘an interest’ in it. For example: when adult children move back home, bringing with them their own assets, which they haven’t bothered to insure, problems will arise. It’s likely the assumption will be that their assets will be covered by their parents’ insurer. The bad news is they won’t be because mom or dad simply don’t have an insurable interest in the property.
The “average” clause
This requires that you insure your assets at their full value. If your Sum Insured at the time of the loss is less than the insurable value of the property, the amount claimed will be reduced in proportion to the under-insurance.
Most people don’t have adequate cover for their household contents and don’t realise the consequences of this. If you have household contents to the value of R800 000, which you’ve insured for R500,000, and you suffer a R100 000 loss, you might think you’re adequately insured. Your Insurer can penalise you for being under-insured and can pay you out in terms of the “average” clause. In this case, it may pay you out five-eighths of R100 000. It’s important to revalue your assets every year at their most recent replacement value to ensure that you have sufficient cover in place.
At claims stage, some Insurers want proof of purchase, such as an invoice. Be aware that the onus is on you to prove your loss.
A handy tip is to take photographs of each item in your home and save them to a disc or external hard drive or to provide a copy of this to your Broker for safe keeping in the event of a loss.
Car Insurance Claims: What You Need to Know …
Being involved in a car accident, or having your car stolen means you’re probably experiencing a huge amount of stress, so knowing how our claims process works could go a long way in alleviating your distress.
When completing a car accident claim form, the following information must be provided:
- A short and clear description of the incident.
- Clear photographs and a sketch of the incident.
- Details about where the incident happened.
- The exact time of the incident.
The more information we have about the incident, the quicker we can process the claim.
Having a clear and detailed description helps avoid the delay of requesting additional information. It also helps us to make sure that you’re covered for that particular event.
Photos and a detailed sketch of the accident are especially important as they show us the area of impact. They also assist in determining whether the description of the incident matches the damage to the vehicle/s.
The time and place of the incident will determine whether or not the Insurer should appoint an investigator to validate the claim. This is especially relevant to incidents which occur in high-risk areas and between 10pm and 4am on weekends.
If you’d like a more detailed breakdown of our claims procedure, please visit our Submit a Claim page.
Load Shedding Affects Everyone – Being Prepared is Key.
Load-shedding increases the risk of power surges, especially when the power is turned back on. When these sudden increases in voltage occur, a surge protector detects the excess current and safely diverts it through your home’s grounding path.
Overloading a surge protector
Just because a multi-plug extension cord has eight outlets, it doesn’t mean you should be plugging in eight different appliances. If you don’t
limit the number of appliances you connect, it’s pretty easy to overload a power surge protector and have a circuit breaker trip.
Overheating a surge protector
When a surge protector overheats, it begins to smoke or melt. At this point, not only can it shock or burn someone, it can also ignite a fire that will lead to property damage. If you have a surge protector operating under obvious strain, unplug some appliances immediately or stop using it altogether.
What does the red light on a surge protector mean?
The red protection light indicates that your surge protector is providing protection to your equipment. If the red light stops working, it usually means your surge protector has been damaged and a new one should be purchased.
What is the lifespan of a surge protector?
Surge protectors don’t last forever. Most estimates put the average lifespan of a surge protector at anywhere from three to five years. And if your home is subject to frequent load-shedding or blackouts, you might want to replace your surge protectors as often as every two years.
You can find surge protectors online, or at any electronics store. They can either be linked to a single appliance or be connected to your main electrical panel.
If you can, it’s probably best to keep your tv and computer cables, telephone cables linked to modems and other sensitive equipment completely unplugged during load shedding.
To File, or Not to File, an Insurance claim?
There are no hard-and-fast rules regarding the terms of no-claim bonuses or rate hikes. What one insurance company forgives, another won’t forget. But bear in mind: any claim may pose a risk to your rates. Understanding your policy is the first step toward protecting your wallet.
If you know your first accident is forgiven, or a previously filed claim won’t count against you after a certain number of years, deciding whether or not you should file a claim should become easier. Properly understanding your policy wording long before you need to file a claim is also important,
Minimizing the number of claims you file is key to protecting your insurance rates from a substantial increase. A good rule of thumb is to only file a claim in the event of catastrophic loss. If your car is slightly damaged in a fender-bender you may be better off if taking care of the expense on your own but if your car is totalled in an accident, filing a claim becomes a more economically feasible exercise.
Keep in mind that even though you have cover and have paid your premiums on time for years, your Insurer can still adjust your risk profile by applying higher excesses to future claims, or by agreeing to a limit on future cover. Your Insurer’s final resort will be not to invite policy renewal or issue notice of cancellation.
If you’ve had your cover cancelled and are now struggling to get cover from another Insurer, you should attempt to improve your risk profile,
Once a short-term insurer has rejected you as a client, the financial consequences can be far-reaching. You may find that most insurers won’t want you as a client and those that are willing to take you on, will charge a hefty premium.
Suretimes Insurance Administrators (Pty) Ltd is an authorised financial Services Provider – FSP 1962.