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Insurance claims 101: Your questions answered

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Filing an insurance claim may not have been on your To Do list, but if
you do end up having to do it, ideally you want as few hiccups as possible.

Nthabiseng Moloi, MiWay Insurance Head of Marketing and Brand, gave Fin24
insight into some of the more commonly asked questions about insurance claims.

I
installed a vehicle tracker, so why was my claim rejected on the basis that my
car did not meet security requirements?

Not all
tracking devices are created equal, says Moloi. Certain insurers may insist on
specific models, given the variance in functionality. Whereas some track speed,
others are optimised to detect impact and others can locate the vehicle.

Ensure that
your tracking device is always in working order and that it meets the
requirements outlined in your specific insurance contract.

Why has
my contract been cancelled due to multiple claims?

An
insurance contract puts the onus on both parties to fulfill their end of the
bargain, with monthly premiums devised to cover the identified level of risk.

Multiple
claims suggest to the insurer that the level of risk outweighs the feasibility
of the contract, which in selected cases can lead to the cancellation of a
policy.

Why has
my contract been cancelled due to non-disclosure?

In some
cases claimants have either given false information with regards to the nature
of their loss, or made false statements upfront so as to lower their monthly
premiums.

Policy
cancellation is not something insurers take lightly, but in instances where
claimants have been found not to have disclosed vital information or have
submitted fraudulent claims, they can cancel a policy, says Moloi.

What is
a regular driver?

In most
cases, vehicles are only insured conditionally based on who is driving the car.
So for instance, should it be insured to cover a driver over 35, who primarily
uses it to get to and from work, the level of risk would be significantly
different to that of a 19 year old.

There is
scope for cover in cases where the car has been loaned to someone other than
the regular driver, but if it is found that the car has in fact been driven
more often by someone else, the insurance contract can be rendered null and
void. If you have a car often driven by multiple drivers, make provision for
this in your policy at the outset.

Why am I
not being paid the settlement amount I was insured for?

The
insurer’s duty is to place the insured in the same position in which they would
have been prior to an accident or theft.

Therefore,
says Moloi, policies seldom provide cover for the purchase price of an insured
vehicle, given the depreciation in value. Cars are insured rather for their
retail, market or trade values.

•        
‘Retail’
is the price a vehicle carries on a showroom floor;

•        
‘Market’
is the average of trade and retail;

•        
‘Trade’
is the price a dealer will pay for your car.

 

Why are
parts being replaced with second-hand versions?

The onus is
on the insurer to replace and restore an insured item to the same position it
was prior to a loss, says Moloi. So, should the insured opt to claim for the
replacement of a 5-year old engine, the insurer may settle with a fully-functional
second hand engine, provided it is of similar quality.

Why were
my extras excluded in my settlement amount?

Additional
features like mag wheels, music systems and sun roofs must be specified when
taking out the insurance policy, as this increases the value of the vehicle,
and in turn, affects monthly premiums. Should you not specifically list these
extras, your vehicle will only be insured based on its original form and value,
which means any add-ons will not be replaced when it is time to claim.

Why do
you settle with the bank when a financed vehicle is written off?

If your
vehicle is currently financed, it is technically still owned by the bank,
despite you being the insured party.

Why am I
being investigated?

Any claim
submitted to insurance must be validated and thoroughly investigated, to ensure
that the loss took place within the bounds of the policy. So for instance, you
might have been burgled without having activated your alarm system, something
that could potentially invalidate your claim if this was a condition stipulated
in the initial terms of your contract.

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