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Watch out! Top 10 car insurance pitfalls

2014-08-22 08:33

TOP INSURANCE PITFALLS: Make sure you read the terms and conditions of your insurance policy to avoid a nasty surprise should you attempt to claim following a crash. Image: Shutterstock

CAPE TOWN - Research by consumer website FairerFinance revealed that 30 000 words was the length of the average motor insurance policy. Have you read your policy in full?

John October, spokesperson for Dial Direct Insurance, comments: "This means that it would take longer for someone to wade through documents produced by most car insurers than it would for them to read a novel such as George Orwell's Animal Farm.
 
“The majority of consumers are notoriously bad at reading the documents, contracts and policies for products and services they buy – often to their own detriment.”

HAVE YOUR READ THE 'FINE PRINT'?
 
The survey also found that just 27% of respondents claim they read the terms and conditions in policy documents in full. Of these, only 17% said they understood them. The survey reports 73% of participants who did not read the "small print" blamed this on the length of documents.
 
October said: “So many of us buy items and services, including insurance, and sign on the dotted line without really taking the time to read the document in order to truly understand what we are buying.

“Although it’s tedious, it is important for consumers to know the ins and outs of their short-term insurance policies and understand the implications.”
 
To avoid a nasty surprises when claiming for vehicle insurance it's critical you re-read your policy.

Read the vehicle section on your policy and ask the following:
 
1 Does your policy include hail damage?
2 Is the driving of your vehicle restricted to a "named" driver?
3 Is cover for theft or hijacking subject to the installation of an immobiliser or tracking device?
4 Are business use extensions included in car and household insurance?
5 What territorial limits are applicable?
6 Are penalties imposed for young drivers?
7 What excesses apply in the event of loss or damage?
8 Are you covered for loss/damage from mining operations, landslip or subsidence?
9 Is there provision for car hire?
10 What other value-added benefits are there?
 
Read the household contents section of your policy and ask:
 
1 What exactly am I covered for and what are the exclusions? For instance, am I covered for loss or damage caused by fire, lightning, explosion, malicious damage, falling trees, storm, flood, the bursting or over-flowing of geysers, equipment or pipes, break-in or theft?
2 What about loss or damage to locks or keys?
3 Will I be covered against the fraudulent use of my credit or bank cards?
4 What are the other value-added benefits such as medical response etc?
5 What are the terms and conditions in terms of security measures that must be present in my home and can I fulfill these requirements?
 
October concludes: “The good news is that Dial Direct’s policy documentation and contracts are written in simple language and in a logical structure to ensure that our clients can bridge the divide between the language used by the insurance industry and their own. Because we offer short term insurance products direct to the public, it is up to us to ensure that our customers understand their cover benefits and the details of their policy.”
 
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