According to the OSTI report, the highest number of disputes, or 42% of overall claims, were related to motor vehicles. “The majority of these complaints were accident-related claims that were declined because of policy exclusions,” states Tarina Vlok, MD of Elite Risk Acceptances, a subsidiary of Old Mutual Insure. “Most of them were due to a lack of due care or precaution in preventing or minimising loss, especially where speeding was involved, as well as misrepresentation or non-disclosure.”
The second highest number of complaints, at 25%, related to homeowners’ claims. “Most of these claims were damage caused by acts of nature, yet insurers rejected them due to gradual deterioration, lack of maintenance and wear and tear, as well as design or construction defects,” she says.
Gap in customer education
“What the OSTI report points to is significant gap in customer education,” says Vlok. “Many customers don’t know what constitutes a valid claim and what’s required for a successful claims experience.”
In one case reported on in the OSTI report, the insured put in a claim for a collapsed boundary wall. “The homeowner said that the damage was due to strong winds during a storm,” she comments, “but the insurance company disagreed, saying the wall was in bad shape due to weeds and a lack of maintenance.” In the end, the OSTI ruled in favour of the insurer.
She adds that insurers take rejection claims very seriously.
“Each claim is carefully considered to determine whether the loss or damage fell within the ambit of the policy terms and conditions before it is rejected,” she says. “Short-term insurers need to report their overturn rate – the number of claim rejections overturned by the OSTI – to their respective boards, so it’s in their best interest to keep their overturn rate as low as possible.”
How policyholders can be proactive
To prevent claims being rejected, there are many things’ policyholders can do. “Firstly, it’s crucial to know exactly what the wording in your policy says,” Vlok maintains. “Before you sign it, make sure you’ve read through it carefully. Remember that the policy wording, schedule and all correspondence constitute the contract. It is therefore also important to read the schedule.” If there’s any clause you don’t understand, ask your broker or insurance company to explain it to you.
Secondly, policyholders should regularly review and update their policies. “Review your policy annually or whenever there are significant changes in your life circumstances,” Vlok recommends. In this way, you can adjust your coverage to reflect changes in value or risk.
Another important consideration is to adhere to maintenance guidelines. In terms of vehicle insurance, you need to ensure your car is serviced regularly, according to the manufacturer’s recommendations. Buildings must be maintained regularly, and specific attention must be given to roofs, waterproofing, and plants growing next to the property. “If there are any significant changes, such as home renovations or modifications to your car, you need to inform your insurer straight away.”
Another good piece of advice is to file claims correctly and timeously, she says.
Lastly, she recommends talking to your broker if you have any problems. “Your broker is there to understand your policy and coverage. Take advantage of their help and expertise as it will go some way to ensure a successful outcome to your insurance claim.”
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