It is true that the average car insurance policyholder does not have much financial skills and expertise – and he will only understand the most basic of financial concepts. Much of the terms and conditions in the policy will be foreign to him – and if not provided in his home language – might be especially difficult to understand.
This reminds me of the well known former chairman of Anglo American, Clem Sunter who revealed that he received a rather interesting comment when delivering a speech in the Free State Platteland. In this Afrikaans speaking community he was warned that English is not regarded as a 2nd language – but rather as a foreign language!
What should be done to enhance the understanding of the car insurance policy?
We have advised on the Car Insurance Blog that efforts be made to understand the terms and conditions of car insurance. With this purpose in mind we have developed a Car Insurance Glossary to assist our vehicle owners with the terms and conditions.
It is however also true that it is not only the terms and conditions that pose a problem. If these terms and conditions appear in a manner that is too “legalistic” or “technical” – the policyholder will also not understand how he is insured and what is to be expected from him.
Can the Consumer Laws protect the car insurance customer from not understanding his policy?
New laws such as the Consumer Protection Act demand that almost every document companies provide to consumers must written be in plain language. According to South Africa’s only dedicated plain language company, Simplified, South African banks and insurance companies are among the first to express interest in plain language certification for their documents.
The language to be used can now be “certified” to ensure that the consumer is protected and better understands what he is reading.
The Simplified plain language stamp is the first plain language certification system in South Africa to:
- be aligned with definitions of plain language in the Consumer Protection Act, National Credit Act and Companies Act
- pay careful attention to current efforts around the world to standardise plain language practice
- include assessment criteria as well as processes for user testing
- be awarded for free – Simplified does not charge for promoting plain language in South Africa
For consumers, the certification indicates that the organisation has complied with the spirit of the new laws.
But what is a Plain Language document?
A plain language document has:
- benefited from real feedback from users of the document (through a user-testing programme)
- passed various assessments that include all aspects of plain language set out in the definition, from content, to relevance, from design issues to style
According to Simplified, the assessments are far more sophisticated than old-fashioned readability tests, which the courts are unlikely to rely on as many plain language professionals are sceptical of their effectiveness. The founders of Simplified are the most experienced plain language practitioners in South Africa, with more than 12 years of international and local experience each in plain language. Gordon serves on the board of Plain Language Association International (PLAIN), the world’s largest plain language advocacy group and Burt acts as South Africa’s representative of plain language legal group, Clarity.
Concludes Gordon: “The Simplified certification is given to companies that are maximising the benefits of plain language to themselves and their customers rather than treating it as yet another compliance burden.”
[Information on Simplified has appeared on Biz-Community (7th April 2010)]
Advice to Vehicle Owners
We would like to urge all vehicle owners to be pro-active in ensuring that they understand their car insurance policies. To make an informed financial decision we would like to advise the following:
- Take time to read the terms and conditions
- Read the policy contract with caution to avoid the fine print and missing essential clauses
- If not certain – ask questions and communicate with either the broker or call centre assistant.
- If the answer is not clear – ask for confirmation is writing to confirm that your understanding is correct.
- Remember – you cannot be forced into signing anything until you are satisfied that you understand everything!!