Knowledge What You Should Know About Understand the dangerous risks inherent in insurance
There are a number of very important concepts you should understand when purchasing insurance. If these aspects of insurance are ignored, you will not just wasting your money, you will expose you to even greater risks.
First, the greatest danger is by far not to take any insurance at all.
The basic rule is that if you can easily afford to replace a property element, then the insurance is unnecessary. However, it is where the replacement cost of an item of property as a motor vehicle is huge, that insurance becomes critical for most consumers.
Insurance is essentially a relationship of risk-sharing contract between the insurer and the insured. The insurance relationship is assumed that the contractual partners to manage risk by taking all reasonable precautions to protect the insured property against loss.
For example, if you do not keep your motor vehicle in good condition, such as having worn tires, the insurer shall be entitled to rebut a claim on the basis that you have contributed to the loss in the case of a car accident. Another example would be to have an accident while driving under the influence of alcohol or drugs.
The next problem is when consumers do not insure their property properly and end up being underinsured.
The danger here is that at the time of claim when the insured value is less than the value of the loss. If you are found to be under-insured, the insurer will apply a formula that will reduce the amount of compensation paid in the event of a claim by the percentage that you are underinsured.
There are several ways to save on insurance premiums, without cutting corners. The few pennies you save today could cost you thousands of rands in the future.
First, the greatest danger is by far not to take any insurance at all.
The basic rule is that if you can easily afford to replace a property element, then the insurance is unnecessary. However, it is where the replacement cost of an item of property as a motor vehicle is huge, that insurance becomes critical for most consumers.
Insurance is essentially a relationship of risk-sharing contract between the insurer and the insured. The insurance relationship is assumed that the contractual partners to manage risk by taking all reasonable precautions to protect the insured property against loss.
For example, if you do not keep your motor vehicle in good condition, such as having worn tires, the insurer shall be entitled to rebut a claim on the basis that you have contributed to the loss in the case of a car accident. Another example would be to have an accident while driving under the influence of alcohol or drugs.
The next problem is when consumers do not insure their property properly and end up being underinsured.
The danger here is that at the time of claim when the insured value is less than the value of the loss. If you are found to be under-insured, the insurer will apply a formula that will reduce the amount of compensation paid in the event of a claim by the percentage that you are underinsured.
There are several ways to save on insurance premiums, without cutting corners. The few pennies you save today could cost you thousands of rands in the future.
Another aspect of your insurance policy is the amount of risk you take in terms of the amount payable in the event of a disaster. The greater the surplus, the more likely you are wearing.
Another common problem is to check that your insurance premium has been paid. The fact that the flow does not pass through the end of your bank account, due to some reason unrelated to the problem is not the insurer, that's your problem. Although a short grace period is normal, most policies will lapse after the grace period and insurers refuse to pay claims filed after that.
Another problem is the time where you have to file claims. Most insurance policies insist that applications are filed soon after an accident or loss, at least one month. For example, in some cases such as insurance on heavy trucks, the claim must be filed within 24-48 hours. In order that the insurer may attempt to minimize the loss by establishing own recovery process and the deployment of recovery experts.
A neglected aspect is the fact that most insurance applications require that you file a claim in case of crimes to the police. Without a police report, most insurers will not pay.
And speaking of crime, do not dare make the mistake of filing a fraudulent claim, you will be found.
Insurers are very experienced in the processing of insurance claims and retains the legitimate fraud. Not only do you end up with a criminal record, your ability to obtain insurance in the future will be severely restricted or impossible.
Do not make the mistake of not understanding the terms of your policy. Well, you should insist on the terms and conditions are explained to you, the insurer has no further obligation in this regard. And you must understand the policy before signing on the dotted line.
Another common problem is to check that your insurance premium has been paid. The fact that the flow does not pass through the end of your bank account, due to some reason unrelated to the problem is not the insurer, that's your problem. Although a short grace period is normal, most policies will lapse after the grace period and insurers refuse to pay claims filed after that.
Another problem is the time where you have to file claims. Most insurance policies insist that applications are filed soon after an accident or loss, at least one month. For example, in some cases such as insurance on heavy trucks, the claim must be filed within 24-48 hours. In order that the insurer may attempt to minimize the loss by establishing own recovery process and the deployment of recovery experts.
A neglected aspect is the fact that most insurance applications require that you file a claim in case of crimes to the police. Without a police report, most insurers will not pay.
And speaking of crime, do not dare make the mistake of filing a fraudulent claim, you will be found.
Insurers are very experienced in the processing of insurance claims and retains the legitimate fraud. Not only do you end up with a criminal record, your ability to obtain insurance in the future will be severely restricted or impossible.
Do not make the mistake of not understanding the terms of your policy. Well, you should insist on the terms and conditions are explained to you, the insurer has no further obligation in this regard. And you must understand the policy before signing on the dotted line.
Incredibly important here are the terms that people often forget. An example is when the policy needs an alarm system in working order and turned on. Neglecting these terms would be extremely unpleasant for a surprise in the case of an insurance claim. Make sure you meet all the conditions of your insurance policy.
A regular review of your insurance is essential. This is very important if you make changes to your lifestyle such as buying a new home, moving, changing careers or divorce.
Couple to stay together will need to ensure that their joint assets are properly insured.
Ask in whose name the insurance policy was issued? That people live together or share a house, it is important that the policy is issued jointly on behalf of the partners, or at least that the interest of the partners is recognized on the policy document. This should not be confused with the wording of the standard contract that most family members are included on the policy of the insured, because it implies a marriage or civil union.
When it comes to the issue of under-insurance of additional content for a partner in the household will obviously increase the value of joint assets significantly. The amounts insured on the policy must be adjusted to avoid reducing the requests for payment due to underinsurance.
Take the issue of "insurable interest". This may have implications in the case of an insurance claim, even if the level of coverage is adequate. Establish and agree on the extent of liability of the insurance company.
Consumers should be aware of any possible increase in the risk created by the arrival of the additional contents of the house; Examples include expensive jewelry, firearms, or works of art.
Many of the above questions and more may be affected by the principles of disclosure. It is the duty of the insured to disclose material information to the insurer to allow the risk to be properly assessed.
"While insurers are generally relaxed in the policy issue in the common names, it remains the duty of the customer to reveal the change in risk profile, and ensure the coverage is increased appropriately.
Many of the above problems could be avoided if full disclosure is made honest from the beginning.
Many negative perceptions stem from disappointment insurance claim stage, because consumers were less candid about their insurance needs with their broker.
Of course there are cases where brokers and insurers can be held accountable for not acting professionally and fairly, and we are fortunate to have institutions of consumer protection in South Africa such as FAIS and Short Term mediators, but non-disclosure of material facts that could affect the purchase of the insurance product is the main reason why insurers do not refute the allegations.
Uninsured or do not know if you are insured correctly? Then get an insurance quote now.
A regular review of your insurance is essential. This is very important if you make changes to your lifestyle such as buying a new home, moving, changing careers or divorce.
Couple to stay together will need to ensure that their joint assets are properly insured.
Ask in whose name the insurance policy was issued? That people live together or share a house, it is important that the policy is issued jointly on behalf of the partners, or at least that the interest of the partners is recognized on the policy document. This should not be confused with the wording of the standard contract that most family members are included on the policy of the insured, because it implies a marriage or civil union.
When it comes to the issue of under-insurance of additional content for a partner in the household will obviously increase the value of joint assets significantly. The amounts insured on the policy must be adjusted to avoid reducing the requests for payment due to underinsurance.
Take the issue of "insurable interest". This may have implications in the case of an insurance claim, even if the level of coverage is adequate. Establish and agree on the extent of liability of the insurance company.
Consumers should be aware of any possible increase in the risk created by the arrival of the additional contents of the house; Examples include expensive jewelry, firearms, or works of art.
Many of the above questions and more may be affected by the principles of disclosure. It is the duty of the insured to disclose material information to the insurer to allow the risk to be properly assessed.
"While insurers are generally relaxed in the policy issue in the common names, it remains the duty of the customer to reveal the change in risk profile, and ensure the coverage is increased appropriately.
Many of the above problems could be avoided if full disclosure is made honest from the beginning.
Many negative perceptions stem from disappointment insurance claim stage, because consumers were less candid about their insurance needs with their broker.
Of course there are cases where brokers and insurers can be held accountable for not acting professionally and fairly, and we are fortunate to have institutions of consumer protection in South Africa such as FAIS and Short Term mediators, but non-disclosure of material facts that could affect the purchase of the insurance product is the main reason why insurers do not refute the allegations.
Uninsured or do not know if you are insured correctly? Then get an insurance quote now.
Category Article General Insurance
