Why is it important to always be honest with your car insurance company?
Some South African motorists could think that car insurance companies are generally hesitant to pay out1; this cannot be further from the truth! If claims are valid, insurers will honour them1. Insurers build trustworthy customer relationships over time, with no misgivings on either side. It’s important to realise that honesty works both ways – the insurer being truthful with his products and the customer with the information he submits1.
The insurer and risk management
The insurer assesses what financial risk you pose to the company based on the information you supply as a policyholder1. Risk is factored into the premium1. So, high risk means paying a high premium and vice versa1. You may enjoy paying low premiums for a while based on submitted half-truths. Still, a person may not realise that you may not have car insurance coverage1. This is because of the terrible danger of the insurer rejecting a claim1.
Honesty is the best policy
Always be honest about your information to avoid a claim rejection later1. In this way, you are allowing the insurer to assess the risk correctly you pose to him1. For example, make sure to let the insurer know that it is a commercial vehicle you want to insure so you can receive the correct policy1.
An example of how a claim can go wrong
A father obtains a car insurance rate lower than that of his teenage son by declaring that he is the car’s regular driver. But what happens if the driver has an accident and the insurer discovers he is not the regular driver? In such a case, the insurer can reject the claim1. The father may also have to pay a higher premium in future or at worst, won’t be able to insure the vehicle because of insurance cancellation1.
How to avoid car insurance claim disputes
Disputes about car insurance claims often happen because of policyholders’ non-disclosure or partial disclosure of information1. Claim time is crunch time because up until then, any lack of customer information has not had to stand any testing. The scary part of a customer withholding information is that the insurer may have to reject a claim1. Be sure to always be upfront and honest with your car insurance company – before and during purchase stage as well as during the claims process. If you provide honest information, your chances of an approved, valid claim are far greater.
What about fraudulent claims?
The car insurance industry considers such claims in a severe light1. No one can suppress the truth as it will surface sooner or later. By acting dishonestly, you may jeopardise any future dealings with car insurers – and all this to save money on lower premiums1. Preferably compare online quotes from various well-known, reputable car insurance companies to get a lower premium. Then you’ll have peace of mind, knowing that the insurer will honour any claim you submit in future1.
Disclaimer
Because of the complicated nature of car insurance, this article can only provide information. If you want to buy car insurance, consult a certified financial advisor for his professional advice.
You may be tired of paying high premiums. So, contact PMD, who will be able to assist you with their affordable, comprehensive car insurance. Why not buy affordable car insurance online with PMD for added convenience?
Source:
This article was prepared by Eric Sandmann in his personal capacity. The views and opinions expressed in this article are the author’s own. The views and opinions in the article should not be attributed to anyone but the author unless expressly stated. Nothing in this article should be relied upon as advice, this publication is presented for informational purposes only. No person should act or refrain from acting in reliance on any information found in this article, without first obtaining proper financial advice from the appropriate professional. The author makes no claims, promises or guarantees about the accuracy, or completeness, of any information linked from, referred to, or contained in this article. The author reserves the right, to edit and change the content of this article.
