Third party claim spoils credit score
If you had an accident and made a third party claim against the person's insurance company who damaged your car, you may be having adverse information on your claims enabler report.
The claims enabler is a separate report that is kept on the Transunion Credit Bureau platform along with a consumer's credit record.
This adverse information has an effect of increasing your current and future premiums with your prospective insurance company, said an aggrieved consumer.
As a result, this item on the insurance data system (IDS) is on SA Insurance Association (SAIA's) agenda for discussion at their next meeting.
Consumer Line has seen an e-mail in which SAIA confirmed that the person responsible for the IDS is looking at the information which is loaded onto the platform by its members, especially in relation to third party claims, and how it can negatively affect consumers.
Gareth Miller, 41, of Sandton, claims that he had a rude awakening four months ago when he discovered that he had two claims against his name listed on his insurance claims enabler report, kept with Transunion, dating back to his third party claim in 2016.
Miller only had one accident but his report shows two accidents on the same day, he said.
The claim amount is also inflated and reported by Auto and General insurance even though he was not with any of the Telesure companies at the time of the accident, he said.
Miller said he lodged a claim with Paladin Underwriters Managers as his car was damaged by their client.
One month after the accident, Miller joined Budget Insurance and requested a letter of comfort from them to state that he would not make a claim with Budget Insurance as he had chosen to pursue the third party claim with Paladin Underwriter Managers, who promptly settled the claim.
He said Paladin paid him R18,845, however, the claims enabler report currently shows two insurance claims that Auto and General listed against his name to the value of R31,500.
Miller said this misleading record could lead to increased premiums, which may have affected thousands of consumers who are not aware of what is being done to their claim's enabler report after they had successfully claimed from a third party's insurance company.
The incorrect information states that R27,500 was for the repairs to his car, and the claim status shows 'repudiated", and R4,000 is for car hire which shows status as "registered".
Miller said he wondered why his insurance premiums were so high, and just recently was quoted R1,600 per month to insure a Hyundai i10.
He then took this up with the Telesure Group which admitted that it was unfair to load inaccurate and exaggerated information on his profile as it could be used wrongly by prospective insurance companies, he said.
Telesure group consist of Auto and General, Budget Insurance, Dial Direct, First for Women, Virseker and Hippo.
"They also confirmed that this is how they loaded information for all their customers who have had a third party claim against the Telesure group," Miller said.
He said the information was kept by the Transunion Credit Bureau on what they
called the claims enabler report of insurance data system, which was only accessible to insurance companies.
He said as soon as they removed the adverse information from his records the R1,600 premium that he was quoted dropped to R1,050.
"I think it is in the best interest of everyone whose third-party claims have been adversely affected to be warned about this and call on Telesure and Transunion to provide them with their claims enabler report that has been listed on their profiles," Miller said.
"Last month they then offered to pay back 12 month's premiums totalling R17,500 even though I have been with them for only five months."
Miller declined the offer.
"No insurance company this large, makes mistakes like this,"he said.
'Data has no bearing on one's credit rating'
Tyrone Lowther of Budget Insurance confirmed that Gareth Miller did not lodge a claim with Auto & General as he had claimed against the insurer of the third-party vehicle and was not its client at the time of the accident.
Lowther said Miller provided his consent for Budget to share his details of the accident for risk management purposes.
After the inception of his policy, he then requested a "No Claim Letter", Lowther said.
He said the purpose of this letter was to state that Miller would not be claiming from Budget for the damages caused to his vehicle in September 2016.
This letter then serves as confirmation between insurers that an insured customer is not being compensated for the damages of one incident by multiple insurers.
He said they captured a claim telephonically on Miller's policy and then declined the claim so that the "No Claim Letter" could be generated.
Lowther said this claims data was then forwarded to TransUnion for it to upload to the IDS platform as part of an automated process, he said.
"The claim data that wasforwarded to IDS showed that the customer had submitted a claim for a vehicle accident with a claim cost, as well as a claim for car hire with a claim cost, and that Budget rejected both claims," he said.
Both claims costs, on IDS, were Budget's best estimate for this claim cost at claim submission stage as we were never made aware of the final cost of repair of Miller's vehicle and couldn't update the amount claimed, Lowther said.
He said when Miller queried the two claims with Budget, it then contacted TransUnion to explain that this claim was only captured in order to assist him with a "No Claim Letter".
Miller then requested compensation to be paid to him by Budget but was advised that there is no evidence that he was prejudiced by the above reporting, and that he was under a duty to disclose the September 2016 accident to his insurer for risk purposes, Lowther said.
His record at TransUnion has now been updated.
"The IDS data now states that Miller submitted one claim which was cancelled, with a claimed amount of zero rand," said Lowther.
He said they contacted Miller to apologise, but he demanded monetary compensation instead.
"As a token of our apology, seeing that the IDS data was not updated in December 2018 when Miller was told that it was, we offered to refund Mr Miller's insurance premiums."
This offer was declined by Miller who instead requested a much higher amount as compensation.
"We believe that our token of apology is extremely fair given that there is no evidence to support Miller's view that he has been financially prejudiced by this data," Lowther said. .
He said though Miller hasstated that he was paying a higher premium at another insurer because of the IDS data, he has not been able to provide any evidence to support this.
"What's more, he is required to disclose the accident that he had in September 2016 to his insurer and this will always be considered for underwriting and risk assessment purposes," Lowther said.
He said IDS data is not used as a credit score and that it has no bearing on one's credit rating.
"The IDS reporting is a valuable tool used by insurers to combat insurance fraud.
"Should insurance fraud not be managed in a robust manner, the insuring public will ultimately be the victims," Lowther said.