If car insured for private use, don’t use it for business!

Business or Personal Use?

Never ever disclose the incorrect purpose of use of the vehicle you would like to insure! If you do you might feel that you are paying a lesser insurance premium, but when found out after an accident your risk losing everything!

We would like to provide an example from actual facts:

Facts:

The insured, a councillor for a Metro Council, was on the way back from a meeting in Pretoria to her residence in Rustenburg. She came around a blind corner over a hill and unexpectedly saw a traffic police officer “standing in the middle of the road”. In order to avoid colliding with him, she applied brakes and collided with a truck. According to the traffic officer, the insured had not driven fast, but at an estimated speed of 80km to 90km per hour.
The insurer rejected the claim based on two grounds:

• The vehicle was not in a roadworthy condition because both front tyres did not contain a full tread.
• The vehicle was insured for private use and at the time she was using the vehicle for business.

In view of the fact that the insured’s vehicle had skidded, and also that the insured was on a business trip having attended a meeting as Councilor, the insurer was entitled to reject the claim and the Ombudsman was not prepared to make a ruling. [Source: Ombudsman Newsletter : 02/04]

We would like to advise that we pay more attention to the disclosures made at the time of purchasing the policy contract. Rather spent a few more minutes in thought when making disclosures and ensure that you get these disclosures in writing as well!

Related posts:

1. What does the SME Survey tell us about business and car insurance?
2. SAICB – Business and SAPS working successfully together to reduce insurance fraud
3. What are the Rules of the Road on drunk driving on a private property?
4. What does the law say about private property traffic management
5. Will the driver of your car for the holiday be insured?
6. How do we judge the requirement of disclosure by an insured?
7. Increase in SUV and 4×4 sales – but are they correctly insured?
8. You better be insured when a grizzly bear gets trapped inside your car!
9. How does a private nursing sister get her vehicle registered as an emergency vehicle in KwaZulu Natal?
10. Is the vehicle on the road to the matric farewell correctly insured?

This entry was posted on Tuesday, August 11th, 2009 at 4:50 pm and is filed under Car Insurance Advice, Ombudsman. You can follow any comments to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.