In South Africa we currently have a proliferation of “do-it-yourself” short term insurance companies. I can’t say anything about the way they advertise. But the fact is, they do have a niche in the market.
But there is one thing that these companies NEVER advertise – when you pick up the phone to call them, you become a broker. In other words, you now have to know enough about insurance to understand the relevance of the questions and to know what to answer. Based on your answers, claims can and will be repudiated.
If you want to challenge such a repudiation, you have to take on the company. Yes, there is an ombudsman for short term insurance, but when you go to him, you are still acting on your own.
The next thing about these call-centre driven companies, is that you phone in to register a claim. Once again you are on your own. They ask the questions and you have to answer. Two people have told me about their respective experiences and said the same thing: “It is like dealing with a lawyer in court, they are doing there utmost best to catch me on something.” Somebody else relates how a representative from such a company called him almost daily for three weeks to try and trick him into admitting that the the 4×4 route on which he had an accident was actually a competition. I can just imagine the result if he was distracted when they phoned and asked him: “We just want to check something about the grading of the route. Can you give us the name of the person who organised the competition?” It is scandalous!
Lastly, and I say this in general, beware of low premiums. It is always the outliers that should be reason for worry. An architect once said to my dad (a building contractor): “when tenders come in, you throw away the highest one, as they want to get rich out of you. You throw away the lowest one, they are going bankrupt on you.” The principle is the same with insurance. If three companies are more or less the same on the premium for insuring my house, how does a fourth company manage to quote 50% less? One of two ways (or both): much more limiting policy wording and/or much more stringent loss adjusters.
In this scenario a broker is responsible for asking the right questions and informing you about the relevance of the information. Brokers are usually easier to fight than a faceless call centre! When you have a claim, and it is not a do-it-yourself call centre, the broker can assist with completing the form. No broker should complete a form on your behalf. No broker should encourage you to be dishonest. But there are certain words or phrases that you should not use.
And when a claim is repudiated and the broker thinks it is unfair, he will assist you with preparing a claim to the ombudsman.
And this post comes from one of these companies trying their best to find a reason, any reason, to repudiate a claim from one of my clients. I am in a real fighting mood …