Does your car insurance cover what you think it covers?
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South African Insurance Association urges policyholders to check what’s in and out

The South African Insurance Association (SAIA) is urging holders of motor insurance policies to review policy documents to be certain that the nature and extent of the cover is what was originally anticipated.

Pamela Ramagaga, General Manager: Insurance Risks at SAIA, says that the emergence of new “InsureTech” players over the past few years has driven considerable innovation in the nature of insurance products, how they are provided digitally and, most importantly, in what is covered.

“Insurance, particularly for motor vehicles, is now increasingly available and affordable to a wider group of car owners. Drivers are more able to shape their cover to match their individual circumstances and needs. For example, premiums have been adapted for people who work from home or who cover comparatively short distances over a month,” she says.

However, Ramagaga says this also means that it is vital for the insured to be certain of the details of their cover before tackling journeys, such as upcoming holiday trips in December, that may be outside of their typical use of a vehicle.

Further, SAIA believes that every person with an insurance policy should look at least twice a year at the policy documents to check what they specifically are covered for as well as the general terms and conditions being applied.

“The majority of complaints after a claim relate to what the consumer thought was covered and what the policy document actually sets out,” says Ramagaga.

She says insurers routinely keep recordings of conversations when policies are being taken out to ensure transparency in the process. “When you are first taking out the policy, that is the time to be clear, concise and honest about what kind of cover you want and the premium you can pay. These recordings are often the first point of reference when there is a difference in interpretation of the policy.”

Historically, all of this information was referred to as “fine print”. But Ramagaga says the reality is that insurance policy documents are nowadays sent in standard or larger text that features straightforward explanations of what is and is not covered.

SAIA therefore strongly recommends that consumers check that their policy indeed covers what they think it covers.

Says Ramagaga: “Doing this check enables you to seek clarification from the insurer and to make changes. It is mostly too late to dispute what is covered by the policy only after you submit a claim.

“SAIA believes that this Transport Month of October is a good time to find your policy document and have a look at what’s in there. Changes are certainly much easier to make now than the day before going on holiday in December.”

She says that a further benefit of reviewing what a policy covers is that the consumer can identify where savings or reductions may be possible.

“Insurers acknowledge the acute financial stress of many consumers and remain keen to speak to policyholders and help find ways to reduce premiums without entirely sacrificing vital cover.

“Ultimately, doing things that reduce your risk profile is the surest way to keep motor premiums affordable,” says Ramagaga.