By Nico Strydom
Sometime you forget to inform your insurer of changes that might have an influence on your insurance profile, but it remains your responsibility and could lead to your claims being turned down should you not do so.
Short-term insurance contracts work in good faith and it is the responsibility of the insured to make known all fundamental facts that can reasonably be expected, to enable the insurer to review the risk properly.
This is according to the ombudsman for short-term insurance, after a recent case where he upheld an insurer’s decision to reject a claim. In this specific case a vehicle used to transport goods for private and work purposes was insured under a personal insurance policy, instead of a commercial policy. The insurer found that the insured had used the vehicle for purposes falling outside the scope of the conditions agreed to and that a condition for cover had been transgressed.
The ombudsman warned consumers to be honest and provide all important information ahead of time when taking out an insurance policy, in order to restrict to the minimum the risk of a claim being turned down. It is also important to be aware of the responsibilities on the side of the consumer regarding the management of an insurance policy.
One of the requirements of any short-term insurance contract is that premiums have to be paid monthly. If this does not happen for whatever reason, the consumer is entitled to a 15 days of grace period to rectify the situation, after which the policy may be cancelled.
Consumers must also inform their insurer of any changes that could influence the terms and conditions of the policy. These include matters such as a change in risk status, additional purchases that have to be covered under the policy, a change of address, new details regarding the regular driver of a vehicle and when an insured item is used for purposes other than those for which it is insured.
The insured person must also see to it that the items covered in terms of the policy are maintained to a reasonable standard. This means, for example, regular vehicle services, sealing your home’s roof and waterproofing it, or updating or upgrading your security system. Insured persons must also comply with the law as insurers will not pay if the law is transgressed, for example drunken driving, failure to renew vehicle and driver’s licenses and non-compliance with traffic rules.
When an insurer issues a policy it is assumed that the information provided to them by the other party is correct. This includes the value and risk connected to the insured items and only when the insurer has all the information at hand, can a decision be made as to what value an insurance policy is viable to provide cover.
It is important to listen carefully to the questions put by the insurer to make certain you understand what is being said and can answer as accurately as possible. Consumers have the right to air their concern if they don’t understand a question. It is also essential for the consumer to take time to read through the policy’s wording thoroughly, as well as the applicable terms and conditions.
Ombudsman for short-term insurance: https://www.osti.co.za/