Ombud protects the insured

Did you know that your insurance company's excuse that your policy has lapsed because you did not pay your premiums for three months is no longer valid?

Did you know that your insurance company's excuse that your policy has lapsed because you did not pay your premiums for three months is no longer valid?

All you have to do is prove to your insurance company that your bank account had money and that you signed a debit order authorising the bank to debit the money on a date that suits you.

The Financial and Investment Advisory Services (Fias) deputy ombudsman, Noluntu Bam, has given consumers another weapon to fight unscrupulous insurance brokers who fail or neglect to collect premiums, or fail to tell them of alternative methods of tendering payment if it is not received by the insurance company.

Bam recently helped Lisa Anne Reddi of Rungatrans CC in KwaZulu-Natal to recover R362 000.

Reddi's truck was involved in an accident and she lodged a claim with her broker. The broker realised that payment was not deducted from Reddi, collected in one day later and forwarded it to Reddi's insurance company, Wheels Underwriting Managers, with risk carrier Constantia Insurance.

The claim was declined because Reddi's insurance company was not instructed to re-instate her policy which was cancelled at its inception due to premiums not being paid.

But Reddi always had money in her account and demanded compensation from her broker. She then approached the Fias ombudsman to compel the broker to compensate her. After investigating, Bam ordered that Rungatrans CC be compensated R362 050,55.

Bam found that the actions of the broker and the insurance company amounted to a contravention of the Fais Act, which resulted in Reddi's loss.

They did not inform Reddi that they did not receive her premiums nor tried to secure premiums from her within 15 days of taking out the policy.

Bam said: "No explanation was furnished as to why the first respondent could not generate a premium for May 15 2007.

"By not informing Reddi of their difficulty in processing payment and by not making alternative arrangements to collect the premium by cheque, the broker and insurance company failed to act with the care and diligence required of financial services providers.

"This is further exacerbated by the fact that the first deduction from Reddi's account was only made approximately 52 days after the policy was incepted," Bam added.

In finding that both the respondents had failed to render appropriate financial services in terms of the Act, Bam then instructed both parties to compensate the complainant for her loss to the amount of R362050,55, after deduction of excesses and unpaid premiums from the original claimed amount of R477425,30.

How to complain

l What do I need to do to lodge a complaint?

You need to complete a complaint form.

l How do I obtain the complaint form?

The form can be downloaded from the Internet,

or posted to your preferred address or else can be faxed to you.

lMust the form be signed?

Whether you obtained the form through the Internet or it was faxed or posted to you, you need to sign it after completion.

If the space does not allow you to relate your complaint fully, you are free to use extra paper that must be attached to your complaint form.

For security reasons forms that have not been signed will not be accepted. Should you experience problems in completing the form, you can call the office of the Ombud and its technical advice desk will assist you.

Call the Fias Ombud at 0860-324766 or 012-470-9080 or fax 012-348-3447 or e-mail Website: