Car insurance is standard practice for most responsible vehicle owners; however, how many of these owners have the ‘right’ cover? “It is worrying to note how policyholders only discover huge issues with their policies once they claim. People often trust insurance providers without knowing whether they are authorised financial services providers” says Peter Olyott, MD of Indwe Risk Services.
As an insurance intermediary, Indwe Risk Services operates in an increasingly competitive market and therefore they are keenly aware of key aspects policyholders should consider when purchasing insurance. Indwe Risk Services highlights three key aspects that need to be considered.
Firstly, financial security is important. Ensuring that you are dealing with a registered FSB (Financial Services Board) approved and authorised insurance provider is key. Any insurance provider who is not registered with and approved by the FSB is acting unlawfully and is not allowed to transact insurance business. The risk of signing up with these companies is that they might take money from policyholders and then fail to pay claims. It is important to deal with a SAIA (South African Insurance Association) registered insurance company or via an FIA (Financial Intermediaries Association) registered broker as they are bound by a code of conduct and are obliged to treat customers fairly. All quality insurers and brokers are members of SAIA and the FIA respectively.
The second key aspect is to ensure that one has all the documentation on hand before obtaining quotations. This includes vehicle registration papers, owners handbook, dealership quotation, tracking system or immobiliser fitment certificate, date of birth and identity numbers of the regular drivers of the vehicles. Without these substantiating documents issues may occur about the insured values, basis of cover including conditions and exceptions: The tracking system or immobiliser fitted may not meet the insurer’s requirements or “regular drivers “can be a concern particularly when parents don’t disclose that their older children are regular drivers.
The third key aspect is the underwriting considerations. All of the questions asked in terms of the “Use of the Vehicle” are deemed to be material underwriting considerations which must be disclosed to the insurers if one is to avoid problems when claiming. “Always disclose all the information as there is no point in paying a cheaper premium on a policy which is not going to respond when one submits a claim,” says Olyott. When considering the vehicle itself, always check the vehicle’s Vin and Engine number as well as registration number to ensure it coincides with the vehicle registration papers. “Having the disagreement with insurers about the actual age of the vehicle at the time of the claim is not ideal – double check at the time of insuring the vehicle and ask the insurers to verify the year of manufacture,” Olyott explains. If your vehicle has been fitted with optional extras, these should be disclosed as well.
Opting for the right cover is important. ‘Comprehensive cover’ will traditionally provides cover for damage caused to your vehicle by any cause, which includes theft, hail damage or accidents. “Sadly not all ‘comprehensive insurance’ is comprehensive,” says Olyott. Some insurance providers may exclude hail damage for example. “Make sure you have the details of what exactly comprehensive cover includes,” says Olyott.
The question of which excess structure is better for the insurance buyer is subjective depending on which claims scenario is likely to be more prevalent. The insurance buyer should calculate different loss scenarios and apply the exercise to view the outcome – before accepting an excess structure. “Many policies have a basic excess but then have additional excesses for under age drivers, stolen vehicles where no tracking device is fitted, hail damage and so on,” says Olyott. “Always ask what additional excesses will apply and do not be afraid to ask the insurance sales consultant to calculate and explain to you how the excesses will apply in each particular situation or circumstance you are concerned with.” Olyott concludes.
Indwe Risk Services is a registered finiancial services provider and insurance intermediary. Indwe provides expert advice and tailor-made insurance options that will suit your particular personal and business insurance needs.