Ombudsman

Is your insurer killing you slowly with poor service?

No Comments »Written on March 22nd, 2012 by jonckie
Categories: Finding Insurance, Legal, Ombudsman, Q&A
Tags: , , , , ,

How often are clients overly impressed with the ease and speed with which they can find insurance  - only to be bitterly disappointed when it comes to the processing of their insurance claims. I have been amazed at reading one such a complaint sent to the car insurance blog by a frustrated insured vehicle owner!

We have on numerous occasions referred to the importance of good service and the need for those seeking insurance to focus not only on price - but also on the reputation of the insurer when it comes to good service.

We wish, having gained the permission of the client who shared his complaint, to also share his recorded experience with our visitors. [We are referring to the insurer as "XYZ"]

Bad Car Insurance Consumer Experience

Good Day

I Am a Customer of "........XYZ Insurance". I Took their Prime Total Loss Protection Cover. I unfortunately had an accident on the 20th January 2012. I then followed all procedure when a person has an accident. I Spoke to a gentlemen at XYZ who told me what to do to lodge a claim after my accident.( I am not going to bore you with the whole email I wrote to the claims department on the day of the accident detailing the accident)

I want to just detail day-to-day accounts that I Had with XYZ Insurance since my Accident.

Monday 23 January 2012

I made a Phone Call to the XYZ Claims Number and I spoke to the Gentlemen by The Name of Botshelo..... Explained the Whole Accident Story.(To my Surprise he had already Received an email that I had sent to their claims department on the day of the accident). He was a very Helpful chap and explained to me what was going to happen, he sent me forms to fill about the Accident and sent me an E-mail Documenting all the required documents for my Claim. He also informed me about my car Towing Charges etc.

Tuesday 24 January 2012

I Make an Effort to get all the required documents (Accident Report, Registration papers, Proof of Service the worx) to make sure that I can speed up the processing of my Claim. I Speak to Botshelo on the phone again to let him know that I have sent through all the Documents that he requested. He Confirms receipt and then tells me that the Car will be sent to the Assessors and I must allow for 48hrs to know what the assessors report will say. I also receive a confirmation Message

Thursday 26 January 2012

I Receive a Phone Call From Botshelo ..... informing me that the assessors have Written off my car. I am Saddened, he tells me of the next Step: in his Words “I Am going to compile the file and send it to the Main Investigator Mr Hugo ... for further Investigation. He will be giving you a call to conduct an interview with you in due Course.

Friday 27 January 2012

Botshelo calls me to confirm that he has sent the File through to Hugo for Investigation and I must expect his Call. I thank him dearly for his speedy response and he says from now on I must liaise with Hugo Directly.

Monday 30 January 2012

I Call The Claims department and I am Told Hugo is not in the Office for the Whole week by Caroline ....(Consultant) she informs me that she is not sure when he will be back. I Inquire if there isn’t someone to assist me and I am told he is the only person dealing with my file as a result they won’t be able to assist! I decide to be patient(I Suppose a week of Waiting is not Bad enough)

Monday 6 February 2012

I Call XYZ looking For Hugo. He is nowhere to be found! I get the Same Response from Consultant named Raditjhaba.

Tuesday 7 February 2012

I Call XYZ looking For Hugo. He is nowhere to be found! I get the Same Response from Consultant named Mpho.

Wednesday 8 February 2012

I Call XYZ looking For Hugo. He is nowhere to be found! I get the Same Response from Consultant named Mellissa. I Throw a Tantrum and I eventually Get put through to a gentlemen who I suppose works closer with Hugo. He consoles me and says that if I have sent through the documents Hugo must have received them. He tells me Hugo is out investigating cases and he will attend to me when he gets back on Monday 13 February 2012 (apparently he was in Durban)

Monday 13 February 2012

I Finally Get Hold of Hugo: he sounds very disorganised, he asks me for the same Documents that Botshelo said I should send. He has no idea where my file is and he requests these documents again in an Email. He also explains that he will be conducting an interview with me once he has received the docs! I remain calm and send him the documents again(You must remember I am hoping that the less rampant I become the quicker will my claim be Processed)

Tuesday 14 February 2012

I Call in to try and confirm receipt of my email to Hugo and Hugo is Nowhere to be Found! I call countless times for the Day and left messages for Hugo and he Never Got Back To me!

Wednesday 15 February 2012

I Call in to try and confirm receipt of my email to Hugo and Hugo is Nowhere to be Found! I call countless times for the Day and left messages for Hugo and he Never Got Back To me!

Thursday 16 February 2012

I Call in to try and confirm receipt of my email to Hugo and Hugo is Nowhere to be Found! I call countless times for the Day and left messages for Hugo and he Never Got Back To me!

Friday 17 February 2012

I am told Hugo is Not in The Office and he will be Back on Monday by Raditjhaba. This is after I called over 6 times and told Hugo is on the line and he will get back to me!

Monday 20 February 2012

I Call in and luckily Get Hold of Hugo, I tell him of my Frustrations and he tells me that he has been busy but confirms receipt of my Email. He says he is still compiling “Documents” and he Will call me Back later for an Interview, I Asked him What Interview he tells me just questions about the accident.

HUGO NEVER CALLED THE WHOLE DAY! I called back around 3pm and I was told he is not in the office!

Monday 20 February 2012

HUGO NEVER CALLED THE WHOLE DAY! I Called about 4 Times and all the Consultants were doing was to read me out comments he made on the System! some comments read out to me were “…Called Barons Woodmead to Confirm service…” This will go on until Friday 24 February 2012.

Tuesday 21 February 2012

HUGO NEVER CALLED THE WHOLE DAY! I Called about 4 Times and all the Consultants were doing was to read me out comments he made on the System! some comments read out to me were “…Called Barons Woodmead to Confirm service…” I Eventually got hold of him and insisted we do an interview there and Then! Sounding disorganised as usual he conducted the interview and informed me that he will investigate further and let me know once all is Done!

Wednesday 22 February 2012

No Word From Hugo!

Thursday 23 February 2012

No Word From Hugo!

Friday 24 February 2012

No Word From Hugo! I decide to call in and he tells me that he is still busy with the file but he is almost finished.

Monday 27 February 2012

No Word From Hugo or My Insurer!

Tuesday 28 February 2012

No Word From Hugo or My Insurer!

Wednesday 29 February 2012

Annoyed I Demand to Speak to Hugo. He is in the office(Still sounding disorganised he tells me he will call me back) I refuse to Hang up but he Assures me that he will be completing my File! HE Never Does, The Whole Day! I am angry, but at the same time patient because I want my claim to be sorted out! I eventually speak to a gentlemen(forgot his name) he takes it upon him to make sure that he investigates.

The Gentlemen calls me back and tells me that he has personally spoken to Hugo and Hugo confirms that he has completed the file and sent the Motivation letter to Linda(I Suppose she is the Manager)

Thursday 1 March 2012

No Word From Hugo or My Insurer!

Friday 2 March 2012

No Word From Hugo or My Insurer! Countless phone calls bear no Fruit! I am dejected and Angry beyond Words!

Monday 5 March 2012

No Word From Hugo or My Insurer! Countless phone calls bear no Fruit! I am dejected and Angry beyond Words! I Call and Demand to speak to Hugo! I Get Hold of him and he tells me my File is with Linda and The Committee She Tells me I must Give it at least 4 Working Days before I can get feedback! He assures me that as soon as the decision is taken he will personally Call me!

Its Friday 9 March 16H30 and there is Still no Word from Either Hugo, Linda or anyone at Prime Meredian! I am way beyond frustrated now as I have lost all hope of getting feedback from them!

Wednesday 7 March 2012

Good News I Get a Call from Linda ... informing me that my Claim was approved with the Insurer and they will be paying the Trade value of the car seeing that the vehicle was written off: I Am Told R81 000 will be paid. Linda Tells me that she will be sending me an agreement of loss to me. And my Bank that is financing the Vehicle.

Thursday 8 March 2012

I call my Bank and I inform them of the outcome. Then i call Linda to try and speed up sending the letter, She tells me she will send, she is still busy, she will send the letter as soon as she can

Friday 9 March 2012

Same Story from Linda, no Letter received, Linda is constantly in meetings.

Monday 12 March 2012

Same Story from Linda, no Letter received, Linda is constantly in meetings. I am sent from pillar to post again, no one wants to send the letter

Tuesday 13 March 2012

Same Story from Linda, no Letter received, Linda is constantly in meetings. I am sent from pillar to post again, no one wants to send the letter

Wednesday 14 March 2012

Same Story from Linda, no Letter received, Linda is constantly in meetings. I am sent from pillar to post again, no one wants to send the letter

Thursday 15 March 2012

Same Story from Linda, no Letter received, Linda is constantly in meetings. I am sent from pillar to post again, no one wants to send the letter

Friday 16 March 2012

I Get a call From Linda saying She Made a mistake, My claim is not approved, She says they have found evidence that I wasn’t driving my Car on the date of the Accident, I am MAAAD beyond words! They tell me all sorts of nonsense about not being the driver and not on the scene etc. She Sends me a letter saying that i am not going to get my Claim paid out!

I have never seen such ridicule in my Life!

Here are Some of my Frustrations:

I signed for Car hire option when I took the Policy (I understood the Terms and conditions) I Have Exhausted all my Funds as I have to hire the car from my own pocket and then claim back for reimbursement after the claim process is completed! 7 weeks of Car Renting is way more costly and unaffordable for me! It is because of their delays in turnaround times that I am currently walking and taking a Taxi!

I So Wish This Email can land on the hands of someone that can assist me to get my Claim sorted out once and For all.

Thanks

Mpho
Data Analyst


Conclusion:

This is one of the important reasons why we have an Ombudsman for the Short Term Insurance Industry. No client deserves such poor service delivery once he has signed on the dotted line. This client should take this matter to the Ombudsman as he as clearly has tried his best to find clarity to close this matter.

We would also like to focus on:

"What exactly is good service from your car insurance company?"

It is important to consider which level of service can be regarded as quality service. Quality service is not necessarily reliant on the best possible outcome for the client – but most definitely will require a fair process with a “human touch”.
Not every claim is a legitimate claim – and the best car insurance service is not necessarily provided by the company who pays out the most claims.
We would like to submit that the following would be characteristics of quality service in the car insurance industry:
  • Accessibility
Can you easily get hold of your insurer / broker when you need them – or do you have to make endless numbers of calls and are sent from A to Z before you are assisted?
  • Transparency
Are you well informed and are the necessary procedures to follow well explained to you? Is there perhaps a company website where you can gain further clarity or gain information about your cover or claims via FAQ’s?
  • Knowledge and Professionalism
Quality service can only be provided if the insurance provider has well trained staff capable of answering the questions raised correctly. A client who finds out during the delivery of service that he has been incorrectly advised will not be a satisfied client.
  • Courtesy & Friendliness
Quality service does not need the best packing of the most beautifully branded documentation or client cards. Most often what is needed is basic human courtesy and friendly conversation. This is especially important for direct insurers where the client does not see the consultant and have the “face to face” experience. The consultant might have to do a bit extra to put the client at ease through his assistance and friendly attitude.
  • Patience & Compassion
An aspect often neglected is the ability to respond with patience. The consultant / broker needs to remind himself that the client who has lost his vehicle or who has just been in an accident might be traumatized and in severe distress. Quality service will require that such a person is treated with patience and with the necessary compassion. This might require that a bit more time be spent in conversation with the client to put his mind at ease that his best interest are cared for and his concerns will be addressed.
The above are just some of the characteristics of quality service in the car insurance industry. When considering where to purchase your car insurance - take the time to enquire not only about price , but also service delivery!!

What does your insurance company deem to be secured parking?

No Comments »Written on February 24th, 2012 by jonckie
Categories: Legal, Motorbikes and Motorcycles, Ombudsman, Q&A, Vehicle
Tags: , , ,

One of the aspects considered by insurance companies when calculating car insurance premiums is where you park your car. This is an important component in calculating the risk of both loss and damage. Not only loss and damage from criminal activity may be affected, but also the damage from environmental disasters such as hail, falling debris etc.

It is also important to keep in mind that there are many different structures used for protection and not all parking spaces are the same. They differ with regards to materials used, methods to secure and “lock-in” the vehicle as well as with reference to access to the vehicle!

When an insurance company provides a quote on car insurance, the insurer asks for specific information from the vehicle owner/potential client. The client discloses these facts which the insurance company will not be aware of and might not even verify. The onus is on the client to make a full disclosure of all the material facts and failure to do so will amount to breach of contract and could nullify the insurance policy!

But is secure parking the same as parking in a locked garage?

We would like to illustrate this by using an example:

Example:

I have received a request from a work colleague and decided to share this with a few insurers:

-              What is regarded by Insurers with reference to secure parking as a locked garage?

-              Are there specific requirements as to dimensions and materials?

Example of Secure Parking

In the photos you will find a typical parking area at a townhouse complex in Bloemfontein.

The Garage area is closed with a lock – with an aluminium /steel roller door.

The gate is also secured with a lock.

There is a wall to the front and the one side – but not all around!

On the question – is your car parked in a locked garage - would Yes be the correct response?

Would the insured be under an obligation to provide additional details?

What would your advice be to ensure full compliance and the correct insurance?

Side view of parking space

We would like to share responses received from some of the Insurance companies:

MiWay:

  1. What is regarded by Insurers with reference to secure parking as a locked garage?
  • Enclosed locked (locked enclosure) – the vehicle is parked in a locked carport where the vehicle is still visible through the palisade/other fencing.
  • Locked garage – the vehicle is parked in a locked garage and the vehicle is not visible from outside.

2. Are there specific requirements as to dimensions and materials?

-          There is currently no restriction on the dimensions of a garage.  But it should be your personal garage – 3rd parties should not be able to see or have access to your vehicle(s) locked inside it.

-          For the structure to qualify as a locked garage, the vehicle should not be visible – this will rule out some materials such as palisades (or the lack of a sidewall in the example.)

Discovery Insure

-          What is regarded by Insurers with reference to secure parking as a locked garage?

A locked garage is regarded as an enclosed outbuilding with four walls and a garage door which could be a roller door, wooden door etc. that can be locked either by an electronic remote control or a key mechanism.

-          Are there specific requirements as to dimensions and materials?

There are various requirements and therefore the best is to consult a registered building contractor for assistance – but the DI wording states that all buildings on the premises must be constructed of brick, stone or concrete and covered with a roof made of slate, tile, concrete, fibrous cement, metal or thatch

-          On the question – is your car parked in a locked garage  - would Yes be the correct response

No, as the item in question would be regarded as a carport and not a garage as access can be gained by climbing over the wall next to the carport or breaking open the lock on the side gate to gain entry

-          Would the insured be under an obligation to provide additional details?

No as he already disclosed all

-          What would your advice be to ensure full compliance and the correct insurance?

Client would need to disclose that the vehicle is parked in a carport with a locked garage door but that access can be gained as the carport is not enclosed.  Full cover will be in place for the vehicle for theft and accidental damage.

Conclusion and Advice:

Rather disclose more than less! Keep in mind that not all insurers might have the same requirements and criteria for what is regarded as secure parking!

A full disclosure of all the facts will avoid having to spend the time and effort in unnecessary fights later. Explain your specific parking area to your insurer and even send photos as an example to be kept on record!

Be Alert to nasty surprises in your car insurance contract!

No Comments »Written on October 12th, 2011 by jonckie
Categories: Finding Insurance, Legal, Ombudsman, Q&A
Tags: , , , ,

Do you know what you agree to when you purchase car insurance? We have come a long way in consumer protection, but we are not doing enough ourselves to avoid the dreaded surprises when submitting a claim.

We are always warned of the so-called “fine print” in contracts, yet we tend to go with the flow and merely believe that if so many others are signing the same type of contracts  - we would be safe as well and there are no further reasons for caution.

It remains very important to be aware that insurers differ – and so do their insurance offerings. Even though they might both be operating within the confines of the law, the one might have a few more exclusions or requirements which you may need to be aware of.

Yesterday I received a link from a friend of a post that appeared on MyBroadband on such a scenario which I would like to share:

“Somebody drove into me - now I must find a new insurance company?

Greetings all, hope this is the right place for this.

Well basically somebody drove into the car behind me, which smashed my car's boot in (whilst I was in a long motionless queue of cars, waiting for a train to cross the road), and after getting the insurance to pay out in full, and getting my car fixed, I wanted to insure it again, but all of a sudden, they say I must send it to the AA for an after accident inspection, initial cost estimated at R1,900.00 (and friends have told me it's a very thorough test, and I could have to put a lot more money into the car, before they are happy..)

Before getting it fixed, they said they'd send a private person to inspect it, but now it's this, the AA test.

Also, now they suddenly kept on mentioning my car is old, etc, when it's only almost one year older than last year, when I started insuring it with them.

What I hate about this, is how it's suddenly my fault (for making the claim?)... but - how is it my fault that somebody drove into me?  I didn't gain anything from having my car smashed in, nor did I from not having a car for months, nor from all of this drama.

So which insurance do you recommend I get? I am under 25 (is that the magic number?), and my car is older than 10 years old, and have had a perfect driving record for years until this guy comes and messes it up for me.

All I want is some comprehensive insurance that can basically insure for the value of my car, without any nonsense terms and conditions (such as my car is too old, I am too young, or it's my fault when somebody drives into a queue of cars that I happen to be in.)

Please help!”

I decided to refer this to a friend working with some of the “legal matters” at OUTsurance and received the following response:
Response:

At Outsurance, we do not require that our clients or prospective clients need to go through the rigorous and costly procedure of obtaining an AA approved certification before insuring a vehicle.

We do require our clients to take their vehicle to one of our many inspection centres, where the existence of the vehicle is verified as well as any pre-existing damage noted.

If all in order, cover can then commence.

The first part is to off course contact us telephonically to obtain a quote and the details of the most convenient inspection centre.

We also offer an “Essential Product” that might be suitable for older vehicles, with different insured  values and thus lower premiums.

Hope this is what you need.

Conclusion and Advice

Without having to reflect on a specific insurer or product, there are a few lessons we can take from the above scenario:
-          Be aware that all insurers do not have the exact same terms and conditions.

-          The fact that your neighbour had a specific response to his car insurance claim does not mean that you will have the same outcome.

-          Even though the Consumer Protection Act provides some protection – this does not take away your obligation towards alertness.

-          The onus is on you to consider with caution the terms and conditions of your car insurance policy.

-          If you are unsure of a specific scenario – email the insurer with the question and request a response in writing to keep on your insurance file at home/ work for further reference.

-          Never ever assume anything ….

Also view:

What do we need to know about the Consumer Protection Act?


Do not leave your Laptop, Palmtop or Notebook in an “unattended” vehicle

No Comments »Written on September 20th, 2011 by jonckie
Categories: Household, Laptop and iPad insurance, Legal, Ombudsman
Tags: , , , , , , ,

Theft from vehicles is one of the major threats to property loss! Yesterday evening I read on Facebook that a friend had a status update referring to her husbands laptop having been stolen from his vehicle.

Many insurers add as an exclusion to their insurance policies any loss from an unattended vehicle.

What is an unattended vehicle?

Situation:

The Insured was the proud owner of a Colt Rodeo double cab, but like a number of double cab owners, he had a problem - where do you safely lock away valuable items? On Thursday evening, 18th September 2003 and at 18hl0, he parked his Colt Rodeo in North Ridge Road, Durban, and he decided to place his Laptop Computer out of sight and behind the rear seat. A car guard was present guarding the Colt Rodeo and three other vehicles.

Approximately twelve minutes later two males in a white City Golf drove into the parking area and parked behind the Colt. One male got out of the City Golf and allegedly threatened the car guard with his life. He then broke the rear right side passenger window, pulled back the rear seat and withdrew the Laptop Computer. He got back into the white City Golf and they then departed at speed.

The Insurer relied upon the following Clause in the Policy -

"We will not pay for loss by theft of any Laptop, Palmtop, Notebook or similar portable computer from any unattended motor vehicle or office."

Ombudsman’s response

The Ombudsman agreed with the Insurer that an "attended vehicle" is usually where a driver or passenger is present in -the vehicle. In view of the clear terms of the Policy, the Ombudsman agreed with the Insurer that it had correctly rejected the claim.

Source: Ombudsman Annual Report 2004

Also view:

How do I find the best insurance for my laptop, iPhone and smartphone?

Do I need to purchase insurance cover for my laptop, IPad or tablet?

Your insurer has the right to know your full accident history

No Comments »Written on May 25th, 2011 by jonckie
Categories: Fraud, Legal, Ombudsman
Tags: , , ,

The Car Insurance Blog received an interesting comment from a visitor. We would like to share this in a brief discussion on the requirements to make a full and complete disclosure.

Comment/ Question

“I had a minor accident, so claimed. I then get a phone call that they are not accepting the claim as they have done a back ground check and that I told them I had two accident not three with previous insurance. Why did they not do a background check first, it’s as though the do this on purpose to try catch you out. DO I HAVE ANY RIGHTS? What can I do?”

Response

We need to emphasize 2 important aspects:

•   Full and correct disclosure are necessary. If you are asked a Q about how many claims you had in a specified period, answer correctly. If you can’t recall or are unsure then first check the info and get back to your insurer. Your premium is based on the correctness of the disclosure and whether you misrepresent the info (intentionally or unintentionally – the insurer may never know!) your premium will be wrong. The contract will also come into effect based on the wrong info and as such it can be voided.

•    When should an insurer check the info? Ideally it should be done upfront if there are sufficient resources to check the info. Practically, it may be done at claims stage. Either way, it doesn’t take away your responsibility to give correct info.

Who knows what?

In an earlier post we referred to the fact that some information falls within the “domain” of the insured client. Only he will have this info and he MUST disclose this to the insurer. Other information is known to the insurer and need not be disclosed by the insured client.

We would like to refer to and distinguish between the information only known by the vehicle owner, and the facts known by the insurer.

Material facts only known by the vehicle owner when applying for car insurance

These facts would include the following:

Personal details

  • Name and surname
  • Home address
  • Identity number
  • Years driving experience
  • Accident record and info on traffic violations
  • Driver impairments etc

Vehicle Details

  • Make and model of vehicle
  • Colour of the vehicle
  • Kilometres on the clock/odometer
  • Whether vehicle has been in an accident
  • Whether vehicle is to be insured at market value
  • Vehicle security features

Usage details

  • Whether vehicle is for personal or business usage
  • Who the regular drivers will be
  • Estimated distance to be travelled
  • Where vehicle is to be kept / garage etc

Material facts to be established by the car insurer

Not all the material facts are known only by the vehicle owner. The car insurer will have specific risk models to enable the insurer to calculate risks. The car insurer will have available information on the following:

  • Vehicle accident statistics
  • Vehicle crime statistics
  • Geographical information and statistics pertaining to this specific area
  • Vehicle market and replacement values
  • Cost of vehicle repairs
  • Cost of processing insurance claims
  • Details on effectiveness of vehicle security systems and tracking companies etc..

Conclusion and Advice

When buying insurance, be very precise in what you disclose – don't leave the door open to have your disclosures challenged. Rather disclose too much than too little! Even if your incomplete disclose might not be fraudulent – it might still make your insurance contract null and void!!

Also view:

Effective history checks could provide cheaper car insurance premiums

Finding car insurance – but only if you are willing to reveal secrets

How do I record information when making direct insurance purchases?

No Comments »Written on April 26th, 2011 by jonckie
Categories: Legal, Ombudsman, Q&A
Tags: , , , , , ,

Are you convinced that your insurance purchase has been made under the terms and conditions that you have agreed to? Once you put the phone down – would the correct information be recorded and would you receive the necessary documentation as proof?

Even though direct marketers are required to record information, and even though this should not pose too much of a dilemma, this is often not as simple as we tend to believe. It is most often the “extra” questions we raise and confirmations we require which are most important to us. I have been confronted with such a scenario which I would like to share as an example:

Example:

A friend of mine had vehicle insurance at a R455 monthly premium. She decided to compare insurance and shared her findings with me.

The direct insurer provided similar cover with a much reduced premium of R284 per month and offered general liability at R5m + small dent policy. She was rather exited to find that the premium will be “fixed” for 3 years and decided that she does not mind very much the R205 joining fee in the comparison.

She decided to change her insurance from her broker and went the direct route.

My friend was contacted during last week and informed of premium increases. She told the insurer that she does not accept any increases as the agreement was that the premiums would be “fixed”.

Response from Insurer:

“As requested before, we have listened to all your initial recordings done with Insurer XYZ and have not found any agreement on selection of guaranteed option. Please contact us on ...... should you have any further queries.”

Reply from the Client:

“I disagree. I spoke to more than one consultant before I initially signed up. I hope you listened to ALL my conversations with Insurer XYZ.

Please call me on ............to discuss. I do NOT accept your increase effective 1 May. One of the reasons I joined Insurer XYZ was because you guaranteed a premium for 3 years.”

Direct Marketing and the Law

The consumer is protected under several laws and regulations. We referred to this in an earlier blog post titled “How do Policyholder Protection Rules protect consumers purchasing insurance online?”

What does the law require with regards to recording of information?

I would like to quote:

Procedures and Systems Required

4.2 (a) A direct marketer must have appropriate procedures and systems in place to—

(i) record all verbal and written communications relating to the direct marketing to a policyholder as are contemplated in these Rules;

(ii) store and retrieve transaction documentation and all other documentation relating to the policyholder; and

(iii) keep the policyholder records and documentation safe from destruction.

(b) Records may be kept in an appropriate electronic or recorded format, which are accessible and readily reducible to written or printed form.

(c) Disclosure records and documentation pertaining thereto must, in any particular case, be kept for a period of at least five years after termination, to the knowledge of the direct marketer, of the relevant policy or, in any other case, after completion of the relevant marketing process, and must be available timeously upon request to the registrar for inspection, and copies thereof must at the request of a policyholder be furnished to such holder.

Advice to insurance clients

Even though the consumer is protected and could find comfort in knowing that the communication must be recorded, much of the disputed and uncertainty could be avoided by following a few steps. We would like to advise that consumers also do a part of the process of information capturing on their own and for their own records:

  • Create an insurance file and add this to your records along with other financial documentation.
  • Keep all the provided policy documentation and notifications in this file.
  • When communicating with your direct insurer or broker, keep a calendar of communications and interaction with the insurer.
  • Note and write down the date and time of communications made via your phone.
  • Write down any possible numbers or codes provided by the call centre operator pertaining to the call.
  • Write down the name of the call centre operator.
  • Ask to be emailed or sent any confirmations about your discussions.
  • When doing business online, scan any documentation or keep the PDF files on record in a folder created for your insurance or financial interests.
  • Keep record of any electronic payments made to the insurer and such payment history.

Your insurance company has to answer to the Ombudsman!

No Comments »Written on February 23rd, 2011 by jonckie
Categories: Legal, Ombudsman, Q&A
Tags: , , , ,

We often refer to the rights and duties of the insured client but fail to focus on the obligations of the insurance company! During the past week we referred to the duty on the clients to make a full and complete disclosure when purchasing business Insurance.

Once the insurance policy has been purchased, and the client performs as required under the terms and conditions of the policy, the insurer has to provide the cover as agreed upon. The obligations also go further - the insurer has to provide answers to the client when dismissing his claim. If such rejection/ dismissal is disputed and the claim is taken to the Ombudsman, the insurer will also have to provide answers to the questions raised by the Ombudsman. Failure to do so may result in a ruling against the insurer!

We would like to discuss this with reference to formal ruling by the Ombudsman – but it is best to start by providing some insights on the Office of the Ombudsman.

Who is the Ombudsman?

The Ombudsman is not one person, but an independent office of well qualified people employed to assist the consumer and insurer in the event of a conflict arising from an insurance claim! Established in August 1989, The Office of the Ombudsman for Short-Term Insurance provides consumers with a free, efficient and fair dispute resolution mechanism. It offers consumers with a “no risk” mechanism to resolve disputes with insurers.

What assistance can be provided by the Ombudsman?

The Office can assist consumers with the following personal lines short-term insurance:

* Motor

* Houseowners (Buildings)

* Householders (Contents)

* Cell phone

* Travel

* Disability

* Credit protection insurance

Commercial Insurance on a Limited basis, i.e. claimants such as small businesses, including a sole proprietor or trader, a juristic person, partnership or trust that has a turnover in the last financial year of less than R8 million. Claim disputes, which the Office can assist with, include fire and allied perils (if there is an involvement of loss of profits/interruption, the entire claim will not be dealt with by the Ombudsman’s Office), glass, theft, motor, travel, sickness and accident and SASRIA claims (affiliated to the aforesaid covers).

But will the insurer listen to the decision by the Ombudsman?

The Office of the Ombudsman for Short-Term Insurance has been granted recognition in terms of the provisions of the Financial Services Ombud Schemes Act. All personal lines short-term insurers have agreed to abide by the Ombudsman’s decision.

The Ombudsman’s task is to act as a “mediator” or informal arbitrator and he/she does not represent either of the parties to the dispute.

The consumer needs to be aware of the following aspects:

* The consumer must complain to his /her insurance company first and only if unable to resolve the dispute with your insurer, then he/she can refer the matter to the Ombudsman’s Office

* The Ombudsman’s decisions are binding on the insurance company but not on the consumer – it does not take away the other legal remedies available to the consumer.

* The Ombudsman’s Office is an independent office

* The Ombudsman’s decisions can be based on either law or equity The Ombudsman’s Office does not give legal advice

* The service is free to insured consumers

Example of Formal Ruling by the Ombudsman

[No or insufficient responses from insurer – Deadline given to insurer by Ombudsman - Formal rulings made if warranted on prima facie evidence]

Problems were experienced with one particular insurer who did not respond adequately to enquiries from the Ombudsman’s office. A meeting with the insurer was convened and a deadline was given by the Ombudsman for the insurer to respond on various matters. The responses received were again not adequate. The matter was brought to the attention of the Managing Director of the insurer concerned and a final deadline was given, failing which the office would consider binding rulings.

A number of matters were again not dealt with adequately by the insurer by the time the deadline expired.  The Ombudsman considered the facts of each case as provided by the complainant. In 8 of the matters it was decided that the complainant has made out a prima facie case for the claim to be entertained. As the insurer elected not to respond to the complaint, binding rulings were made in these cases.

(Note- the rulings had the desired effect and that particular insurer is now cooperating with the office.)

Comments by the Ombudsman

It is unfortunate when the insurer does not afford the Ombudsman’s offices the necessary cooperation in order to finalise matters in a speedy cost-effective, objective, informal and fair manner. This lack of cooperation undermines the very functioning and essence of an Ombudsman ‘s function.

It not only places the Ombudsman’s offices in a bad light, but also does very little to allay the insured’s fears and suspicion that Insurers gladly accept his premiums, but that when a claim arises an insurer is more likely to look for reasons to reject a claim, than in fact to settle it. It is the view of this office that these misapprehensions of the insurer reflect badly not just on this office or the insurer concerned, but casts the whole insurance industry in a very poor light.

Conclusion and Advice

The Office of the Ombudsman is a very important component in the swift and efficient process of dispute resolution between a client and an insurer. It helps to avoid long and costly legal processes and provides clarity to both clients and insurers on how different scenarios are to be dealt with.

On Insurancechat.co.za we will share many of these rulings and discuss their importance to the insurance industry!

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