1. "DO NOT TOW" stickers
The majority of the Insurance Companies will send you stickers that you must place somewhere on your car where it is easy to see. These stickers indicate that the insurer has a "do not tow" policy. This means that only certain towing companies are authorised and allowed to tow your vehicle in the event of an accident. A telephone number of a call centre that must be phoned to obtain authorisation to tow the vehicle will be displayed on this sticker. These call centers are open seven days a week, 365 days a year. If you fail to get authorisation from the insurer and you give permission to the towing company to remove the vehicle, the insurer will either pay nothing or a very limited amount for the towing and storing of your vehicle. Some of these towing companies charge very high rates and if you authorise them to tow your vehicle, it can cost you a lot of money that you will not be able to claim from your insurer.
2. No Claim Bonus
This is a very important point that you need to look at and make sure that your "no claim bonus" is correct on your insurance policy. This is one of the most common reasons why an insurance company rejects claims. The no claim bonus is a mechanism that was designed to reward those policy holders that had comprehensive vehicle and house content insurance for a certain period and did not submit any claims to the insurance company. The idea is to reward the policy holder by reducing their premiums by a certain percentage, depending on how long they had comprehensive insurance without claiming.
Example: If you had uninterrupted comprehensive insurance for one year and you did not claim, the insurer will discount your premium with approximately 10% on renewal date (after 12 months) of the policy. If you did not claim for two years, your premium will be discounted by approximately 20%, etc. The maximum discount of 50% is usually awarded.
Each insurer approaches the amount of discount awarded differently, so the percentage discount that you will receive will differ from insurer to insurer.
There are a few things that are crucial when determining if you do qualify for a no claim bonus discount :
- Your previous insurance must have been COMPREHENSIVE cover.
- Your insurance may not have had any interruptions in cover. This insurance history does not have to be with the same insurance company, as long as there was no interruption.
- Some insurance companies will allow a grace period (normally 39 days) if you were uninsured. It might be that you sold a vehicle and waited a few days to get your new vehicle, causing an interruption in your comprehensive insurance. Always consult with your broker regarding the underwriting applicable to your policy.
- If you submitted a claim on your insurance policy, irrespective of who was the guilty party, your no claim bonus will be affected. Again, the insurers differ from each other on how your no claim bonus status will be affected by a claim.
When you submit a claim against your policy, you will need to confirm and provide proof of the no claim bonus benefit that you enjoyed on your policy. The insurer will request your previous insurance history such as: name of insurer, policy number and period of insurance. They then might contact your previous insurer to request proof of no claims on your comprehensive insurance.
If your previous insurance cannot be verified, the insurer can (and normally does) reject your claim. The claim is based on two things: (1) you disclosed the incorrect details and, (2) you paid a reduced premium, for which you did not qualify. Remember the information you provide to the insurer is used to decide if they can accept your risk and if they can what the correct premium payable for this risk is.
We come across many clients that had problems with the previous insurance, before they became a client with V-Plus Brokers, where the concept of no claim bonus was not properly explained to them. A common comment we get is: "They only ask me for how long have I been driving, without making an accident." Now compare this "one liner" with the detailed explanation above.
Be careful not to attempt to "outsmart" the insurers by getting your premiums discounted by giving the incorrect no claim bonus details, AND then you end up with major problems when you need to claim.
Remember, insurance is buying peace of mind.
3. Overnight Parking
When you apply and accept a Short Term Insurance Policy, one of the questions asked is where your vehicle will be parked at night. You would have declared something like: in the yard, with gates, in the yard without gates and fencing, in the street, in a locked garage, in a security complex. The overnight parking of your car as declared by you is recorded by the insurer. If your parking arrangement on the car at night has changed, you must contact your broker and / or your insurance company and tell them of the new overnight parking arrangements. If you fail to do this, the insurance company can reject your claim while being parked at your residential address.
4. Risk Address
This is the address where the car will be kept most of the time. It is extremely important that this address must be correct at all times on your policy. The risk address is one of the factors that the insurance companies look at to decide if they will accept your insurance risk, and if they do, what is the correct premium payable on the risk. If they have the wrong risk address they are not in a position to evaluate the risk and can therefore reject a claim, should you have one. Remember this is where the car will be kept most frequently at night time. If you are not sure, ask your broker or the insurer.
5. Insured Value
The majority of the insurance companies can insure you for market value or retail value. The market value is the average of the trade value and the retail value as indicated in the Auto Dealers Guide. There are also other factors that must be taken into consideration like the condition of the vehicle and the mileage on the vehicle.
An insurer will usually indemnify you for the market / retail value or the sum insured as on the date when the loss occurred, whichever one is the lesser. The responsibility will always be with you, as the policy holder, to make sure that your vehicle is insured for the correct value. If you have any doubts on the value of your vehicle, take the vehicle to a motor dealer and ask them to evaluate the vehicle for insurance purposes and ask them for a certificate. Send this certificate to your broker.