It is important that the owner of a vehicle carefully considers the risks to his vehicle and how to protect himself from the financial risks threatening his ownership. Car Insurance is the best measure to have peace of mind that the financial interest in ownership is – but then there must be total disclosure and honesty on the part of the insured!
I am one of those who dread reading insurance policies – yet, this is such an important part of being insured! Honesty is not only needed at the time of submitting a claim – but also at the time when the policy is discussed and acquired! It is at this time that the client discloses to the insurer all those factors that might be important to measure the risks and calculate the insurance premium to be paid…
I would like to explain through an actual example how the failure to disclose all these factors might be detrimental to the owner and his expectations to be compensated under the policy:
Example
When the Insured took out his Insurance Policy with the Insurer, he was noted as the regular driver of the insured vehicle. His vehicle was involved in a collision whilst his son was the driver of the vehicle. The Insurer investigated the matter and discovered that the Insured’s son had been the regular driver of the vehicle for some time. Had the Insurer been informed of the change in the risk profile, the premium would have increased from R126.16 to R207.14 per month. The Insurer accordingly received only 60% of the correct premium.
Ombudsman’s response
In the light of the aforesaid factual scenario, the Ombudsman agreed with the Insurer that it was entitled to maintain its rejection of the claim.”
This is an important lesson to us all – we need to disclose all the facts to the insurer! Only through complete and honest disclosure will the correct premium be calculated and can we expect the insurer to provide compensation to meet our legitimate expectations!