I BOUGHT a Mazda 2 in July 2008. The purchase was financed by MFC, and the car was insured with Unity Insurance Company. On April 26 2009 I was involved in an accident and I submitted a claim to Unity on April 28.

I BOUGHT a Mazda 2 in July 2008. The purchase was financed by MFC, and the car was insured with Unity Insurance Company. On April 26 2009 I was involved in an accident and I submitted a claim to Unity on April 28.

To my dismay I was advised that my premium for April had not been received and the claim was therefore dismissed.

I couldn't understand how the premium wasn't paid (it was the first time since I had taken the insurance that my premium was not paid) and it was only when I studied my bank statement that the whole thing became clear.

I had moved my bank account from Absa to Nedbank, and I duly informed MFC of the change on March 25 and Unity on April 1.

For some unexplained reason a double instalment was paid to MFC in April (without my knowledge) with the result that my account with MFC was then in advance, but there were not sufficient funds left in my account for the premium for Unity.

By a cruel twist of fate the accident took place in the same month and I was unaware of the mix-up at the new bank.

Seen against this background I feel Unity's decision to reject my claim and cancel my policy forthwith was extremely harsh, especially as it is common practice in the car insurance industry to give the client the opportunity to pay the one month's outstanding premium and then to honour the claim if it was just one month's premium that was in arrears when the claim was submitted, and if it was the first time that the premium had fallen in arrears.

I am left with a written-off vehicle on which I am still paying monthly instalments to MFC.

Is there any way to persuade Unity Insurance to reconsider their decision?

Nondumiso Mkhwanazi

This query was submitted to Unity Insurance Company, together with details of Nondumiso's cancelled policy and we received the following response from Unity on February 19:

We refer to your letter dated February 18 2010 and wish to respond as follows:

Thank you for bringing this matter to our attention. Seen in the light of the arguments raised in your request we have made a decision to settle Mkhwanazi's claim.

We will be in contact with her to discuss the settlement of her claim.

We trust that you will find the above in order.

Louis Meyer,

Executive Client Services (Directors department)

Comment:

This is indeed a story with a happy ending. The query and response speak for themselves. I have only two things to add: firstly, Nondumiso's experience illustrates the terrible things that can happen if the premiums on a car insurance policy fall in arrears. Insurance companies are within their rights if they cancel such a policy immediately, without any prior notification to the client. And, since Murphy's Law has not been repealed, that might be precisely the moment when you are involved in an accident.

Even if Murphy gives you a temporary reprieve, trouble awaits you from another quarter: Your contract with the finance company compels you to keep the vehicle insured for the duration of the contract. So if the insurance lapses, you are technically in breach of contract.

This brings me to the second point: it is heart-warming to see that insurance companies (or at least some of them) have not forgotten that legalities need to be tempered with understanding and sympathy.

I was impressed by the speed with which Unity Insurance responded to our request, as much as by the compassion shown in their decision.