‘Insurance companies should educate customers on products’

INSURANCE companies should adequately explain their products to customers so that they can make informed decisions before buying policies, the Insurance and Pensions Commission (IPEC) has said.

The insurance regulator said policyholders should also read the terms and conditions of the policies they want to buy or seek clarification from the insurer to check if they are in agreement with the conditions.

Speaking at the belated Insurance Awareness Day commemorations in Gweru at the weekend, IPEC public relations officer, Lloyd Gumbo, said this would reduce cases of complaints from policyholders who feel short-changed by insurance companies when they refuse to settle claims.

“There are cases where policyholders lodge complaints when insurance companies refuse to compensate them because of exclusions in the policy,” said Mr Gumbo.

“For instance, someone may have a vehicle third party insurance cover but expects the insurance company to treat them as someone with comprehensive cover.

“It is clear that the policyholder would not have understood what the policy is all about. It is therefore critical that insurance companies explain to prospective policyholders what the policy entails, what it covers and the exclusions.

“On the other hand, the policyholders must also read the terms and conditions of the policies before they pay their first premium to see if the policy will cover them adequately or if there are any exclusions.”

Mr Gumbo said this would help build trust between insurance companies and policyholders.

He warned policyholders against undervaluing their assets when they buy insurance with the sole purpose of paying lower premiums.

“If you do that and then you lose that asset and when you need compensation, the insurance company will only give you the insured value, which obviously will not be adequate to replace that asset,” he said.