The Ombudsman for Short-Term Insurance has published her annual report for the 2017 calendar year, and almost half of the complaints received were for motor vehicle claims. Consumers should take note that one of the leading causes for a rejected claim is “alleged misrepresentation of underwriting details”.
Claims may be rejected for misrepresentations about:
– Your claims history, previous insurance history and credit history
– The regular driver of a vehicle
– The purpose of a vehicle (personal vs business)
– Having a tracking device in your vehicle or any other related security system
– The non-disclosure of important information which could affect the acceptance of the risk and the terms on which they would be prepared to accept the risk. Examples of this include the suspension of a licence, sequestration, or medical conditions of the driver.
“It’s essential that the information you disclose to your insurance company or broker is always truthful and accurate,” says Adele Artman, key accounts manager and marketing at Indwe Risk Services. “Premiums are calculated individually and are based on the facts disclosed to the insurer, so only full disclosure of all the relevant information will ensure that you are adequately covered.”
If you are unsure as to what constitutes material fact, Artman recommends that you discuss this upfront with your insurer or your broker, rather than trying to do so after a loss has occurred.
“Insurance is based on trust and good faith. If you are attempting to save money on your monthly premiums by misrepresenting the facts, you run the risk of having a claim repudiated, which will place an unnecessary and heavy financial burden on you and your family,” says Artman.
An example of this would be if you stated that you – with all your years of driving experience – were the regular driver of a vehicle, when in reality it was your inexperienced 18-year-old son. Non-disclosure or misrepresentation, in the hopes of paying less every month, could result in your claim being rejected, if your son had an accident whilst driving the vehicle.
“It’s foolhardy to waste money on even the cheapest premiums, if the insurer is unlikely to pay out even the smallest claim, due to material non-disclosure of the facts on which the risk is accepted. All the information you share with your broker or insurer must be based on facts. Speak to your broker to conduct a needs analysis, to fully understand what cover you require and then to determine the best product for you,” concludes Artman.