Some reasons insurer may reject claim
HAVING your valuables covered under a short-term insurance policy provides much-needed financial security against loss or damage.
However, should you fail to uphold your end of the deal an insurer may be well within its rights to declare a policy invalid. Below we highlight some of the things consumers do which might result in the insurer cancelling cover or refusing to pay out on a claim.
1. Providing incorrect details about the regular driver under a motor vehicle insurance policy.
Your insurer underwrites the policy based on the risk profile of the regular driver. The regular driver is the person who will drive the vehicle most often in any given monthly period. A regular driver’s age, insurance and claims history, occupation and how long he or she has had a valid driving licence are but some of the critical factors taken into account when determining whether cover will be granted and, if so, on what terms.
2. Failing to update your risk address.
Have you moved house, or moved to a different city? What about your work address? Insurers determine premiums based on risk and part of your risk is determined by your street address. What are the risks of flooding or fire at your new address? Is it a densely populated area? What are the crime statistics?
Your insurer also needs to know the level of security at your new address. Are there burglar bars or an alarm system protecting your insured home contents? Is your insured vehicle going to be parked in a garage, behind locked gates or on the street?
All these factors affect the assessment of the risk and must be disclosed to the insurer whenever relevant during the currency of the policy.
A greater risk often goes hand-inhand with higher premiums. If you do not tell your insurer, this is referred to as a material misrepresentation or non-disclosure, and may render the policy void.
3. Using the insured property to conduct business when this was not declared to your insurer.
Motor and home improvements. Thinking of renovating your home? Getting out the drill or hammer and doing a bit of DIY on a Sunday might seem like a good idea. Maybe following a YouTube tutorial on tiling your floors or waterproofing the roof seems easy enough. However, poor design and faulty workmanship on your house may result in damage not being covered by your insurance policy. Rather get an expert opinion for all major building work to avoid invalidating cover for certain losses.
Notify your insurer before commencing major building work on your property as this may affect your cover. If a wall comes crashing down or there is a theft of your home contents, there is a good chance of your insurer rejecting a claim because you did not inform it of this change in the risk.
Building work which alters the size or security features of your home must also be discussed with your insurer. |