Why do I write about car insurance issues such a lot?
Because every day I receive desperate emails from one of more of the one-third of SA motorists who choose to insure their cars — despite extreme budget pressure — in the belief that they’d be covered if disaster struck.
As it does, in SA, alarmingly often.
They’re desperate because after having become that hijacking, theft or accident statistic and submitting a claim, their insurer sent them a rejection letter, for reasons they didn’t anticipate.
They’d failed to call their tracking company every six months to ensure their device was still working as their tracking contract required, for example — an issue I covered in last week’s column.
Or their 20-something child had taken over as the car’s regular driver, and they’d failed to inform their insurer; or someone test driving their car during a service crashed it, and their policy didn’t cover an incident if someone other than those “nominated” on the policy was behind the wheel at the time.
Or their car’s computer system had revealed that they’d been speeding, or they’d forgotten to take their newly acquired car to their insurer’s assessment centre to be checked out, as the Ts and Cs prescribed.
And then there’s the issue of driver use.
If your car is insured for personal use, allowing you to drive to and from your regular place of work only, would you be covered if you were involved in an accident on your way to work-related conference?
If your policy has really strict terms, strictly applied, that could well be what happens, as ridiculous as it seems.
While investigating a repudiated stolen car claim recently, the complainant said her insurer initially attempted to repudiate on the grounds that she had been attending a business meeting at her local church when her car was stolen from the parking lot.
She was able to prove that she was actually at an art lecture, so they found another reason not to pay her out.
Two “driver use”-related complaints handled by the office of the Ombudsman for Short-Term Insurance reveal how unwavering some insurers can be on this issue.
In both cases the complainants had personal use cover and were thus only covered while their cars were being used for personal use or while travelling to or from their main place of business.
One insurer rejected the crash claim because the insured was on his way to meet a friend for dinner to discuss a business proposition.
They argued that because he was not using his car for personal use at the time of the accident, he did not enjoy cover at the time.
Because the policy wording in question allowed for that, the Ombud’s office upheld the rejection.
In the second case, a work-from-home bookkeeper was delivering statements to a client when she was involved in an accident.
Her insurer rejected her claim for the same reason.
And again, the Ombud’s office upheld the rejection because the policy wording backed up the insurer’s decision.
This is why it’s so critical look way beyond premiums and excess amounts when comparing motor insurance policies — you need to dip deep and interrogate the bits that could trip you up at claim time.
My own policy says this on the subject of use: “Private use is for private or social purposes, including driving between your home and regular place of work.
“Business has additional cover where the vehicle forms an essential part of the performance of any work or function, such as estate agents, client liaison and delivering any commodity.”
Cars being driven for business reasons have more chance of being involved in an accident because they are on the road more often and in a greater variety of places, hence the higher premiums applied to “business use” policies.
The wording left me unsure if I’d be covered while driving to a work team-building event, or to the airport for a business trip. (Insurance assessors always investigate these things when faced with a hefty claim.)
So I made a call to my insurer and was assured that as long as I didn’t routinely use my car for business purposes, I’d be covered if I happened to have a “insured event” while on an occasional work-related trip.
Yes, I could have argued that my car does not form “an essential part” of my work function if such a claim had been rejected, but having that conversation on record gives me peace of mind.
Many people who have insured their cars for personal use, believing that to be correct as they are not sales reps and the like, would have their claims repudiated if the car was stolen from a hotel while they were attending a work conference, for example, or while they were fetching a consultant from the airport as a favour for their boss.
They have no idea that their premium payments are giving them false comfort. Such thoughts that keep me up at night.
Some personal motor policies do provide some wriggle room.
Christelle Colman, CEO of Ami Underwriting Managers shared with me her policy wording on this:
“Domestic Use: Domestic purposes relating to vehicles means you may use it for social and private travel, travel to and from work, as well as travel for business or occupational purposes once a week.
“If more than once a week, it cannot be covered under domestic use.”
Now that is really clear, fair and tailored to many people’s lived experience.
Senior assistant ombudsman with the office of the Ombudsman for Short-Term insurance Thasnim Dawood said whether you have any wriggle room on what your insurer considers to be personal or domestic use depends entirely on the wording of your policy.
Insurers or brokers were compelled to properly disclose those terms and conditions and their implications to consumers at the time the policy was taken out, she said.
Similarly, consumers must be totally honest about their vehicle use.
Complaints about personal motor claim rejections were dealt with on their own set of facts, Dawood said, “and might allow us to invoke our equity jurisdiction in deciding on the matter”.
In other words, to go beyond the technicalities of policy wording and made a decision based on fairness.
“While it would be ideal for the insurer to allow the odd business trip on a private use policy, it is the insurer’s prerogative as to the type of risks which it will accept, in line with its underwriting criteria,” she said.
You have been warned.
Take a long, hard look at the Use section of your policy and act accordingly to make sure you’re not potentially wasting your monthly premium payment.
CONTACT WENDY:
Email: consumer@knowler.co.za
X (Twitter): @wendyknowler
Facebook: wendyknowlerconsumer
IN YOUR CORNER | Look at Use section of your policy to ensure you’re not wasting your money
Consumer journalist
Image: 123RF/CONVISUM
Why do I write about car insurance issues such a lot?
Because every day I receive desperate emails from one of more of the one-third of SA motorists who choose to insure their cars — despite extreme budget pressure — in the belief that they’d be covered if disaster struck.
As it does, in SA, alarmingly often.
They’re desperate because after having become that hijacking, theft or accident statistic and submitting a claim, their insurer sent them a rejection letter, for reasons they didn’t anticipate.
They’d failed to call their tracking company every six months to ensure their device was still working as their tracking contract required, for example — an issue I covered in last week’s column.
Or their 20-something child had taken over as the car’s regular driver, and they’d failed to inform their insurer; or someone test driving their car during a service crashed it, and their policy didn’t cover an incident if someone other than those “nominated” on the policy was behind the wheel at the time.
Or their car’s computer system had revealed that they’d been speeding, or they’d forgotten to take their newly acquired car to their insurer’s assessment centre to be checked out, as the Ts and Cs prescribed.
And then there’s the issue of driver use.
If your car is insured for personal use, allowing you to drive to and from your regular place of work only, would you be covered if you were involved in an accident on your way to work-related conference?
If your policy has really strict terms, strictly applied, that could well be what happens, as ridiculous as it seems.
While investigating a repudiated stolen car claim recently, the complainant said her insurer initially attempted to repudiate on the grounds that she had been attending a business meeting at her local church when her car was stolen from the parking lot.
She was able to prove that she was actually at an art lecture, so they found another reason not to pay her out.
Two “driver use”-related complaints handled by the office of the Ombudsman for Short-Term Insurance reveal how unwavering some insurers can be on this issue.
In both cases the complainants had personal use cover and were thus only covered while their cars were being used for personal use or while travelling to or from their main place of business.
One insurer rejected the crash claim because the insured was on his way to meet a friend for dinner to discuss a business proposition.
They argued that because he was not using his car for personal use at the time of the accident, he did not enjoy cover at the time.
Because the policy wording in question allowed for that, the Ombud’s office upheld the rejection.
In the second case, a work-from-home bookkeeper was delivering statements to a client when she was involved in an accident.
Her insurer rejected her claim for the same reason.
And again, the Ombud’s office upheld the rejection because the policy wording backed up the insurer’s decision.
This is why it’s so critical look way beyond premiums and excess amounts when comparing motor insurance policies — you need to dip deep and interrogate the bits that could trip you up at claim time.
My own policy says this on the subject of use: “Private use is for private or social purposes, including driving between your home and regular place of work.
“Business has additional cover where the vehicle forms an essential part of the performance of any work or function, such as estate agents, client liaison and delivering any commodity.”
Cars being driven for business reasons have more chance of being involved in an accident because they are on the road more often and in a greater variety of places, hence the higher premiums applied to “business use” policies.
The wording left me unsure if I’d be covered while driving to a work team-building event, or to the airport for a business trip. (Insurance assessors always investigate these things when faced with a hefty claim.)
So I made a call to my insurer and was assured that as long as I didn’t routinely use my car for business purposes, I’d be covered if I happened to have a “insured event” while on an occasional work-related trip.
Yes, I could have argued that my car does not form “an essential part” of my work function if such a claim had been rejected, but having that conversation on record gives me peace of mind.
Many people who have insured their cars for personal use, believing that to be correct as they are not sales reps and the like, would have their claims repudiated if the car was stolen from a hotel while they were attending a work conference, for example, or while they were fetching a consultant from the airport as a favour for their boss.
They have no idea that their premium payments are giving them false comfort. Such thoughts that keep me up at night.
Some personal motor policies do provide some wriggle room.
Christelle Colman, CEO of Ami Underwriting Managers shared with me her policy wording on this:
“Domestic Use: Domestic purposes relating to vehicles means you may use it for social and private travel, travel to and from work, as well as travel for business or occupational purposes once a week.
“If more than once a week, it cannot be covered under domestic use.”
Now that is really clear, fair and tailored to many people’s lived experience.
Senior assistant ombudsman with the office of the Ombudsman for Short-Term insurance Thasnim Dawood said whether you have any wriggle room on what your insurer considers to be personal or domestic use depends entirely on the wording of your policy.
Insurers or brokers were compelled to properly disclose those terms and conditions and their implications to consumers at the time the policy was taken out, she said.
Similarly, consumers must be totally honest about their vehicle use.
Complaints about personal motor claim rejections were dealt with on their own set of facts, Dawood said, “and might allow us to invoke our equity jurisdiction in deciding on the matter”.
In other words, to go beyond the technicalities of policy wording and made a decision based on fairness.
“While it would be ideal for the insurer to allow the odd business trip on a private use policy, it is the insurer’s prerogative as to the type of risks which it will accept, in line with its underwriting criteria,” she said.
You have been warned.
Take a long, hard look at the Use section of your policy and act accordingly to make sure you’re not potentially wasting your monthly premium payment.
CONTACT WENDY:
Email: consumer@knowler.co.za
X (Twitter): @wendyknowler
Facebook: wendyknowlerconsumer
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