Payout refused because third party was the driver

SHE'S READY TO HELP YOU: Sowetan Consumer Editor Thuli Zungu
SHE'S READY TO HELP YOU: Sowetan Consumer Editor Thuli Zungu

Know what you are spending money on

MANY consumers take out insurance because they want to ensure they are covered if their cars get stolen or their houses are broken into or burns down.

Theo Mogangoe did likewise but his insurance company declined his claim on the basis that he allowed a non-registered third party to drive his car.

Though Mogangoe took out his cover four years ago, he does not have their policy document and does not know what are his rights and duties in terms of his policy, he said.

"I'm in the dark. I don't know what and what I am not covered for," Mogangoe said.

He learnt about the exclusions only after his car was damaged in an accident, he said.

Mogangoe allowed his sister-in-law to drive his car to buy groceries last month.

"Unfortunately she was involved in an accident while driving the car with my permission," Mogangoe said.

"She was not at fault. The third party admitted being at fault but my insurance company has refused to fix it," Mogangoe said.

He regrets changing his previous insurance company to Santam.

He said he did not think of lodging a claim with the third party's insurance company because he thought Santam would fix his car and later claim damages from the insurance of the other driver.

"That should not be difficult, more especially when the third party has admitted wrongfulness," Mogangoe said.

It will cost him R20,000 to repair his car, he said.

Fatima Benjamin, the complaints manager at Santam, said they were investigating his compliant but due to its complexity they are unable to comment at this stage.

Consumer Line also spoke to Julie Retief-Marais, a spokesperson for insurance driven by the Automobile Association, who gave handy information that can help the insured steer clear of problems.

She said a number of customers usually apply their minds to their short-term insurance policies when they need to make a claim.

"That's when things like excesses and insured values come into play. Although a short-term insurance policy may seem daunting and confusing, as a rule one should always read it carefully, from cover to cover, including the dreaded fine print. This will prevent any surprises at the claims stage," Retief-Marais said.

She said before signing on the dotted line of your short-term insurance policy, it's advisable to have a good understanding of the fundamentals.

Retief-Marais said consumers need to understand what they are paying for and why.

She said a number of factors are taken into account when determining what a customer's car insurance premium will be.

These factors include the make and model of the vehicle, where the customer lives, where the vehicle is kept at night, who the driver of the vehicle is, what purpose the vehicle is used for and the customer's previous claims history.

Also taken into account is the safety record of the vehicle model, plus the cost to repair or replace the vehicle, she said. She said consumers did not understand why premiums increase every year even though the value of the car depreciates.

Her explanation was that consumers are not covered only for theft or when their cars are written off but for repairs as well.

"The repair of vehicles is the biggest cost for insurers due to the high number of accidents that take place in South Africa each year.

"The cost of repairing a vehicle and parts used increase every year, even though the car has depreciated, so premiums have to increase in line with these costs," Retief-Marais said.

She said some insurers, like insurance driven by the AA, will take the depreciating value of your vehicle into account when reviewing your premium.

Tips on how to lower your insurance premiums:

  • When signing with the provider with the lowest rates look at their level of cover, client service and value-added benefits;
  • Combine your motor and household insurance - combination policies usually cost less;
  • Make your car safer - install a tracking device and immobiliser and you may qualify for a substantial discount on your premium;
  • Try to keep your claims record clean because, when you make a claim, your premium will in all likelihood go up; and
  • Don't claim for small incidents that you could pay for out of your own pocket such as a cracked windscreen on your car or a broken window in your house.
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