The Citizen (KZN)

Whole truth and nothing but the truth for insurance claims

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When you take out a short-term insurance policy, the responsibi­lity lies with you to provide the insurer with all the necessary informatio­n so that it can correctly underwrite (assess and price) your risk.

The informatio­n you provide at sales stage is used to enable your insurer to accurately determine whether or not to cover you, what premium to charge and whether the policy should be endorsed with special conditions. The policyhold­er protection rules requires the insurer to design its sales questionna­ire to readily get the correct answers from you which are required to underwrite the risk. The insurer is also required to explain to you the purpose of the questions, and that a claim can be rejected if you have provided incorrect informatio­n. If incorrect informatio­n is provided unintentio­nally, your insurer may still pay out a claim (but isn’t obliged to).

If you misreprese­nt or fail to disclose material facts to the insurer, your policy may be cancelled with effect from the start date. You’d be entitled to a refund of premiums since the start date, but this is cold comfort when you’re faced with a claim.

You’re required to inform your insurer of any material change to your circumstan­ces throughout the duration of the policy. In the case of a car, this may include a change in address, regular driver and number of claims submitted. You also have to be entirely truthful about the circumstan­ces prompting a claim.

Most insurance policies contain a clause entitling the insurer to reject the entire claim even if just one aspect of it is found to be dishonest. Insurers do detailed investigat­ions of claims. If a policyhold­er has had a policy cancelled for dishonesty, it’ll be difficult to find alternativ­e cover. Although the burden of proving fraud is high, and lies with the insurer, the implicatio­ns are serious. A fraudulent claim may not only result in a claim being rejected or a policy cancelled, it may also be reported to the police. – Ombudsman for Short-Term Insurance

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