10 Things to keep in check to ensure that your short-term insurance claim gets approved

Getting insurance cover for one’s assets is commonly seen by many as a  grudge purchase, and as much as some customers might not enjoy paying their monthly premiums, the good news is that they’re assured that their assets are well covered (within the limits of the policy wording) to face the worst of unforeseen circumstances.

Very few people read through the fine print in their insurance contracts, which differs significantly between policies and insurers. In some instances, it’s only when they need to submit a claim, that they learn about a missed clause that they have not adhered to or an exclusion, resulting in a possible rejected claim.

Elizabeth Mountjoy, Private Wealth Manager for FNB Insurance Brokers says, “Claim rejections happen and often leave the customer feeling dissatisfied and cheated.  As a customer you have the right to request the reasons for rejection from the insurer and either approach the insurer’s internal arbitrator or take it further by approaching the Ombudsman for Short Term Insurance to counter the rejection.  Often, claims are rejected for valid reasons, and it is unfortunate that in some cases, the customer has misinterpreted the cover and exclusions or failed to comply with the terms and conditions.  Where you feel the rejection is not warranted, obtain a second opinion to validate your claim and present this evidence to your insurer.”

Below are 10 things customers need to keep in order, to ensure that their claims are approved:

1. Wear and Tear – This is where items have a life span and once that time has been reached, it breaks or no longer works effectively. This is not covered by the policy and is noted as an exclusion.  For example, buildings need to have water proofing on the roof, as they’re exposed to sun and harsh weather conditions, these generally perish after 2 years. If your roof leaks following a storm, due to this wear and tear, your policy will not cover the water proofing. Depending on your policy wording, the resultant damage may or may not be covered.
2. Maintenance – This is general upkeep of your property or items. Failure to do this will result in a rejection as this is a specific exclusion.  For example, tree roots cause damage to pipes, drains, paving, walls or your motor vehicle must be serviced annually.
3. Defective workmanship/ materials used – This is specifically excluded. For example, the contractor builds a wall, fails to follow South African building regulations or mixes the building materials incorrectly and the wall collapses.
4. No cover – This is where an incident has occurred, but the policy does not provide the  cover for this event.  Events that are commonly insured are fire, wind, storm, hail, theft but some events may/may not be included such as accidental damage and power surge.  A claim for accidental cover, where this has not been selected, will result in ’no cover’.
5. Non-Disclosure – Failure to notify your broker or insurer of relevant changes that may increase the risk of acceptance for the policy to respond to may result in your claim being rejected. For example, a tenant occupies your property which you have disclosed.  After a couple of months, the tenant moves out of your property and is vacant (no signs of anyone living there by way of visiting the premises, lack of furniture). This change in risk has not been disclosed. Should vagrants move in or damages are caused  to the property, this could result in a rejection of your claim.
6. Late notification – The insured has 30 days to report a potential claim to the insurer/broker.  Failure to do so may prejudice the insurer’s ability to assess the claim and result in a rejection.
7. No insurable interest – The interests of all parties must be noted on the policy for their respective rights and interests to be covered.  If you do not have financial interest in an asset, you cannot insure it.  For example, your friend’s car is registered in her name, but you are insuring it on your policy without notifying your insurer/broker of the insurable interests. 
8. Unpaid premiums – If you place a stop order on your short-term insurance debit, this will result in an immediate cancellation and no cover will exist as your intention was not to pay the premium.  If your debit order returns due to lack of funds,  you are required in terms of legislation and your policy wording to pay this outstanding amount before the insurer will consider the claim.
9. Misrepresentation, dishonest or criminal behaviour – All these could draw serious consequences for the Insured, to the extent that they could be blacklisted and may not be able to obtain insurance.
10. Avoidance of cover – In the event of fraud, misdescription, misrepresentation or non-disclosure of material facts, the insurer could cancel the policy with immediate effect or declare the policy null and void from inception date, resulting in the claim being rejected.

In order to avoid a situation where your claim could be rejected, it is important to familiarise yourself with the above-mentioned reasons, but also make sure that the terms and conditions are reviewed regularly. Following the claims procedures, complying with the time limitations and taking the necessary steps to avoid a loss are some of the  important steps you can follow if you want your claim to be settled.

“It is extremely important to understand your insurance contract and claim parameters. Every policy sets out your obligations in the event of a claim. This includes the time period within which a claim must be reported to the police and your insurer, what information you must provide to your insurer, as well as the time frame within which to dispute the outcome of a claim,” concludes Mountjoy.