Claims card useful for replacing items

When your insurer chooses to replace insured items that were lost, stolen or damaged, it must either pay the supplier of the new goods or pay money into your bank account – usually the account against which your insurance premium is debited each month.

Santam has a claims card for this purpose. It is a debit card that can be used at any of the 200 000-odd merchants that accept Visa-branded cards, Fanus Coetzee, the head of claims at Santam, says. But it also functions as a loyalty card of sorts. The benefit, Coetzee says, lies in the “cash-back” on the card if you opt to shop at one of Santam’s preferred suppliers.

“The card’s primary function is as a cash-back refund mechanism that allows us to reward policyholders when they purchase replacement items from suppliers with whom we have negotiated special price arrangements,” Coetzee says.

The refund goes onto your card, which is a “reloadable pre-paid debit card”. You can’t load credit onto the card, only Santam can in the event of a settlement. The policyholder incurs no costs when using the card, unless you leave your balance unspent for two years after it was loaded, in which case you will be charged a R10 monthly dormancy fee.

Other insurers, such as Discovery Insure, also reward policyholders for supporting preferred suppliers. For example, Discovery Insure will give you up to 50 percent of your fuel spend back – up to a limit of R700 a month – if you fill up at BP service stations and earn enough points for good driving.

The claims card benefits the insurer too. It’s easier for the insurer to load value onto a card than it is to pay suppliers directly, Coetzee says.

There is nothing that compels a policyholder to use a Santam claims card, Coetzee says.

“During the claims process, the settlement methods – repair, replace, and cash – are discussed with the policyholder. We offer the claims card as one of two options under the replacement definition – when we choose to replace.

“The policyholder is then informed of the benefits of the claims card as an option. The other replacement option is where Santam will procure the lost or broken item from a supplier directly.

“The last option is to do a cash settlement by means of an electronic funds transfer,” Coetzee says.

Coetzee says the option of a cash settlement is in itself “probably one of the biggest drivers behind insurance fraud, as this is perceived to be an easy way to obtain cash”.