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Made a few claims recently? Switch insurers before yours dumps you

10 March 2021 8:46 PM
Tags:
The Money Show
Bruce Whitfield
Insurance
car insurance
outsurance
Wendy Knowler
short-term insurance
household contents
consumer issues
Ombudsman for Short-Term Insurance

Finding alternative cover once your insurer 'offloads' you is difficult and expensive, warns consumer ninja Wendy Knowler.

"Jump before you are pushed"

That's the advice from consumer journo Wendy Knowler in the case of short-term insurance when you've made a few recent claims, especially if they're big ones.

Because insurers will consider you too high-risk, the risk to you is being dumped she says.

It doesn't matter how long you've had no or few claims, if you're going through a bad patch or bad luck then you're in very real danger of being offloaded/dumped/fired/cancelled...

Wendy Knowler, Consumer journalist

Your premiums and excess may be higher [if you switch], but it beats being offloaded by your insurer because of what they call an 'unfavourable loss ratio'.

Wendy Knowler, Consumer journalist

It’s usually catastrophic if that happens, because you must declare it to other insurers, meaning you’ll find it hard to get alternative cover. And if you do, it will probably be hellishly expensive.

Wendy Knowler, Consumer journalist

RELATED: Car insurance claims drop during lockdown, but premiums don't follow

On The Money Show, Knowler relates the story of an Outsurance client of four years who'd had "a relatively normal claims history" until recently.

Due to a combination of (bad) luck, worse weather and Johannesburg’s notorious potholes, I lodged four car claims in five months. All my claims were genuine, and none were due to any negligence from my end.

Sarah Midgely, Outsurance client

Outsurance paid out the claims says Sarah Midgely, but things turned sour when she moved from Joburg to Cape Town.

After contacting a representative to update her details, Midgely says she was informed her policy was being cancelled "as you are currently causing us a loss".

"Nowhere in my policy does it state they may cancel if they are making a loss within a certain period of time."

Knowler has taken up the issue with both Outsurance and the Ombudsman for Short-Term Insurance.

According to the Ombud's office, all the policy holder protection rules require is that the insurer gives the policy holder at least 31 days' notice of the intention to cancel the policy. They must give reasons in that cancellation letter.

Wendy Knowler, Consumer journalist

Outsurance then was technically within its rights, she says.

Thank goodness it doesn’t work that way with medical schemes! As members, sometimes we claim a lot and sometimes we claim a little... At any given time, the lucky/healthy subsidise the not-so-lucky/healthy in a medical scheme.

Wendy Knowler, Consumer journalist

For more detail, listen to the conversation in the audioclip below:




10 March 2021 8:46 PM
Tags:
The Money Show
Bruce Whitfield
Insurance
car insurance
outsurance
Wendy Knowler
short-term insurance
household contents
consumer issues
Ombudsman for Short-Term Insurance

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