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Thread: INSURANCE

  1. #1
    Email problem Phil Cooper's Avatar
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    INSURANCE

    I have followed various people's tirades against the Insurance Industry, and it has taken a fair degree of self control NOT to get involved, which would just result in a slinging match...

    I have been in the insurance industry for some 42 years now, and can HONESTLY say that if you place the correct covers with a reputable insurer they will NOT give you hassles at claims time - in fact, I know Insurers with whom I deal that have gone out of their way TO pay claims - not avoid them - even when the claim falls "just outside" the intention of the policy. This is even more likely when you have shown loyalty and stayed with them for some years - their attitude is that you have shown THEM loyalty, and they recognise it is THEIR time to thank you.

    The problem is that you get some people who change Insurers every year - for, perhaps, as little as R20 per month on R1,000 premium. When their is a "grey area" claim, the Insurer then looks at your record, sees that you swing and switch, and thinks "why pay out? This client has no loyalty, and we will probably never get a chance to get the money back in a "good" year"!

    People think that you get the same cover from every Insurer. This is NOT the case - just like you would not expect a R500 watch to be as accurate as a R30,000 Rolex - the lower the premium, generally, the more restrictive the covers on the policy. And you only find the flaws AFTER the event, when you can least afford it.

    In a nutshell: there is an expression: You get good insurance, you get cheap insurance, but you do not get good, cheap insurance.

    The Direct Insurers play on this, and tell you how much money you can save by buying cover through them. This is cr*p - the money that conventional Insurers pay Brokers is the same, or less, than the amount that Direct Insurers spend on their plethora of advertising campaigns. So you have the option of either paying a broker to hunt among several Insurers to get you the most cost-effective insurance, and assist you to get the maximum payout in the event of a claim, or to pay a Direct Insurer's advertising bill, and "fit" into THEIR sole product, which may not QUITE be right for you.

    I have just quoted to a new client, who wrote the following to me:

    Hi Phil

    Thank you very much for letting me know as I am clueless. My jewellery is worth nearly R400 000.00 and my son's bicycle to replace is about R12 000 and my camera equipment is worth about R22,000.00 alone. The motorbike to replace Honda Big Wheel 85cc not sure.

    My garage and camping items are also worth quite a bit so I think this is awesome. I have had nothing but irritation and problems with Outsurance and I paid them a fortune when I had my items in Storage during my divorce and some items got stolen and both Magna International Removers (where my items were stored) and Outsurance refused to pay : each saying each other should pay and items were dropped and broken and damaged when my furniture was delivered and Outsurance refused to pay for that as well so I lost about R85 000.00 in loss and damages so I cannot wait to change. Then Outsurance treated me like I was some criminal until such time I was in tears. So the sooner I move off Outsurance the better.

    Thank you for your very full description. What do I need to do to change from Outsurance to your market and what happens with items like I have listed above?


    I would add that

    - My quote is 28% less than she was paying through Outsurance

    - The Covers are FAR wider. Through Outsurance NONE of her jewellery was covered (they exclude items of jewellery over R1,500 unless specified) - she has full All Risks now, both at and away from home, the bike is automatically covered, as is the camping equipment.

    She now has FAR superior cover, and we will handle and resolve any problems like the above (not that they will arise now - she has proper cover for less money)!

    Of course NO policy covers EVERY eventuality - policies have clauses, and you need to read and understand them - or employ a Broker to advise you accordingly. The trouble is that most people do NOT read what the policy they have offers - and then complain when something which is excluded clearly, in black and white, is not paid. They hasten to blame the "insurer ripoffs" - and NEVER acknowledge their negligence in the matter.

    The thing to bear in mind is that Insurance in designed to cover "sudden and unforeseen" events - NOT something which you KNOW will happen!

    So - Ian - bluntly, I am surprised Insurers actually did pay your camera claim. From what you said, this "died" a natural death due to age and wear and tear, which is NOT covered my any insurers. I was expecting to see you complaining bitterly that they declined it, but was pleasantly surprised when they did pay it. Were you grateful? No - you complained (a) about the excess (which has appeared on every schedule you have ever received, but probably never bothered to read?) and then (b) about the premium increase you expect because you have had a tiny claim! The Direct Insurers may do this - but, as already explained, most reputable insurers won't.

    When it comes to the Driveway claim - again, the event is not "sudden and unforeseen". If something is constructed with inferior materials, it is not a case "if" it is going to be washed away - it is a case of WHEN. Ian - if I came you you as an Insurer, and said "I have bought a car with inferior brakes - I am going to drive it on the road, and I almost certainly WILL have an accident within 6 months due to brake failure" - would you insure me? It is tantamount to the same thing! You claim, in this instance, is against the drive builder who did not build it adequately.

    Pap_Sak - you were one of the people who had a (lucky?) experience with Business Outsurance. If you compare their wording to a "Conventional" Insurer's wording, you will find that there are DOZENS of extensions provided by the conventional market's policy excluded from Outsurance. (A summary of a comparison is attached - these are only SOME examples) If you have a claim that impacts in these areas, only THEN do you realise the shortfalls!

    Some examples that I have picked up over the years:

    - Outsurance Business policy, quoting to a client of mine, specifies for Computers that the computers must be "cleaned and serviced according to manufacturers specifications" annually. No clean/service, no cover. Not on conventional policy.

    - Likewise, under the Fire policy, they state if there is "any flammable materials within 1m of a heating source, there is no cover in the event of a Fire claim". So - after the claim, there is a piece of paper on a counter half a meter from the kettle - no claim as you have not complied! Is that reasonable - conventional Insurers do not have this on!

    - One of their clients has a R120,000 burglary just after the Christmas shut down, in the process of which the thieves smashed the burglar alarm. It is a condition of the policy that if the alarm is not functioning, a Guard must protect the premises until fixed. The security company could not fix the system as the staff were on leave over Christmas for nearly 3 weeks. At the end of the day the client had to pay R63,000 for guarding - out of their pocket - because the policy stated there MUST be guards - but THEY are not liable for the costs. "Conventional" insurers have a similar clause - but the Guards' costs form part of the claim. It can hurt - and you only discover it after the event.

    - Most Domestic Insurers exclude loss or damage caused by falling trees "whilst being felled". So, if the tree feller drops a tree on your house by mistake, you have no cover - you better make sure that HE does! When I was doing a comparison of a few Direct Insurers' wordings a few years back, I found one excluded the words in italics. So, in a storm, the large blue gum near your house takes out the lounge and contents - a bit laste to find out this is excluded grom your covers.

    Guys - please understand something in closing.

    Reputable Insurers will NOT go out of their way to decline your claim.

    But - do NOT expect EVERYTHING to be covered - which is where a good Broker can advise you.

    But do NOT expect, when you get 8 quotes for Insurance, 7 of which are between R800 and R1,000 a month, and one is R150 a month, that the covers are the same.

    Insurance is based on statistics - and statistics say that one in 3 insured motor vehicles will have a claim each year (from a windscreen to a scratch to a total write off). The average cost of a claim is close to R25,000. So, at the end of the day Insurers need to collect around R30,000 from every 3 clients each year to cover the claim and their administration charges. If one Insurer, faced with these statistics, is only getting R15,000 from every 3 clients, there is only 1 way they will survive - by NOT giving the same covers, so that they can reduce their average cost of claim to R12,000 - or the incidence goes from one in 3 to one in 4 as they exclude covers other Insurers would pay for.

    IAN - It costs the Insurer to administer a claim - whether it is for R1,000 or R100,000 it costs around the same. So they impose an excess (A) to reduce the number of "tiny" claims, thus reducing admin costs, and (b) make the Insured "interested" in minimising claims. Some Insurers these days have moved to "flat" excesses on motor, and a few are now issuing excess-free policies - but you pay extra for the privilege. In the end of the day you actually "come out ahead" by applying the excess....

    BUT - you mentioned thay you have just noticed the excess. Again, I ask - for how many years have you received the schedule - and NOT read it?

    Just like every one else.

    Until AFTER the event - when it is too late!
    Attached Files Attached Files

  2. Thank given for this post:

    ians (14-Nov-12), Vanash Naick (15-Nov-12)

  3. #2
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    I agree with you, i have had my bussiness insurance with the company, for more than 7 years, and never read the policy, the broker sends me every time they make any changes, nor have i ever put in a claim, that why i put in the claim for the camera more test than anything else, because i have other equpiment which is worth a lot more than the camera and after all the hassles with my driveway claim, i decided to test my bussiness insurance. By the way phil the camera is damaged, the screen has a crack and has gone blank, however there is no sign of an impact point which could have cause dthe screen to crack from being dropped or hit. The insurance company was given the camera to check. I also learnt how much my excess will be if i put in a claim, because i sent them an email requesting the info.

    The driveway is another story, i need to get in a specialist to advise me. Just for your information, as the assessor enquired, when was the first time we saw a hole in the driway, there was no hole, it collasped as i drove over it, so it is a bit more complicated than it sounds and the fact that there is no evidence that the driveway is going to collapse between the new and old claim, indicating that unless a proper investigation is done, no one knows if it was from the storm or over a period of time. Considering we have had some hectic storms and lots of water damage everywhere, who knows.

    Reading insurance contracts is for broker to read and understand, i dont ask you to read the SANS book everytime i do electrical work on your property, that what my customers pay me to do. If they want to know soemthing or if i find something is not correct, illegal or defective, i will notify my customer before it becomes an issue, because thats what they pay me for, otherwise they could deal directly with an "electrician" they find outside electrical wholesalers, you get where i am going with this?

    One good thing about complaining all the time is you get to learn stuff, this thread is a good example, if i wasnt making a noise about insrurance all the time, would you have taken the time to write this thread?

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    Gold Member Chrisjan B's Avatar
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    Please tell me then why only Outsurance are prepared to insure my wife's camera equipment. I am with Santam and they flatly refuse to insure it.

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    Silver Member Darkangelyaya's Avatar
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    Most Domestic Insurers exclude loss or damage caused by falling trees "whilst being felled". So, if the tree feller drops a tree on your house by mistake, you have no cover - you better make sure that HE does! When I was doing a comparison of a few Direct Insurers' wordings a few years back, I found one excluded the words in italics. So, in a storm, the large blue gum near your house takes out the lounge and contents - a bit laste to find out this is excluded grom your covers.

    Regarding Tree Felling Actions:
    Public Liability for a tree felling company costs a whack of money a month.
    Yet Tree Felling Company owners like myself who diligently pay this, now suddenly have to compete with the latest illegal immigrant on the corner wielding a chainsaw (most probably one of my stolen ones too).
    Clients fail to see that when you pay peanuts, well then, you get monkeys chopping down trees.
    BTW, I have never, in 12 years in Business, had to claim from Public Liability.
    By all means use those guys for small jobs if you must, but if the job is big or dangerous, call the right (wo)man for the job.
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    Phil i have been thinking about your comment about the car with faulty brakes, it is pretty much what has happened with my driveway it seems, only differance is i didnt know about the faulty brakes and nor did the insurance comapany until i put in the claim.

    I purchased my house 4 years ago from a deceased estate, a couple of years prior to me purchasing the house, there were some renovations and additions done, i have copies of all the quotes from the different building contractors and all the "approved plans" etc. Cut a long story short, when i purchased it came with approved plans, signed off by the municipality indicating that all buiding, drainage,foundations etc were down according to plan. Because i have a bond i have to take out insurance, which i do, insurance doesnt send out anyone to verify that ther is even a house on the property, but still take my money every month, then a couple of months down the line we have some hectic rains, which destroy the top part of the driveway which is part of the additions which were done. The claim is rejected due to defective workmanship.

    The second claim, the driveway is according to spec, so the insurance cant use the defective workmanship excuse, and to note that there is no sign of the driveway collapsing between the 1st and second claim, considering i drive over it at least 10 times a day, surely it should have collapsed when the second part did after that heavy rain a couple of weeks ago.

    The way i see this is like taking a car i purchase to the AA, they check the brakes and approve them as safe, i drive down the road have an accident, then i am told by an insurnace assessor that they are rejecting my claim because my brakes where defective. Sorry, but help me here i must be missing something.

    But hey i am not expert on this type of thing, thats why as i mentioned it is time to call in the experts.

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    IAN - It costs the Insurer to administer a claim - whether it is for R1,000 or R100,000 it costs around the same. So they impose an excess (A) to reduce the number of "tiny" claims, thus reducing admin costs, and (b) make the Insured "interested" in minimising claims. Some Insurers these days have moved to "flat" excesses on motor, and a few are now issuing excess-free policies - but you pay extra for the privilege. In the end of the day you actually "come out ahead" by applying the excess....

    I understand that an insurer must impose an excess, to reduce the number of tiny claims, then why dont they offer people who dont claim for 5- 10 years a reduction in the excess?
    The other problem i have, if you say the excess is to administer the claim and the cost is the same, then why if i have an accident and the damage is R10000 it cost R1000 and if the damage is R100 000 the excess is R10 000?

  8. #7
    Email problem Phil Cooper's Avatar
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    Hi, Chrismine
    Beats me why Santam will not insure your wife's camera equipment. Is it a case it is used professionally, or is it pure domestic covers?

    Darkangelyaya
    I agree with you wholeheartedly! If you want a decent, professional job done with the right backup - use people like you! The trouble is, like Insurance, people do not look at the potential consequences. If you want to cut down a tree in the middle of the garden- with no buildings, walls, fences, etc. possibly in reach - well, if you want to take a chance, that is up you you (but just pray nobody gets injured in the process, as you, as owner of the property would be held legally liable (I do not meen one of the fellers)! (By the way - if you want to quote me to remove 21 blue gums on my property please contact me. Thanks!)

    Ian
    The Excess is not to reduce the Insurer's admin costs - it is to keep you "interested" in minimising the claim

    I would chat to your Broker and ask him to approach the Insurer to see if they will reduce the excess. Many Insurers today are quoting 5% instead of 10%, and a number are also offering flat excesses of between R2,500 and R5,000 - that may be to your benefit. Some Insurers - albeit very few - are offering excess free covers. At least one is offering a Franchise instead of an excess: this means if your claim is equal or less than the franchise amount, you have NO claim, but once it exceeds that, your entire claim is paid from the ground up.

    As to whether I would have written the comments: perhaps not in the manner which I did, specifically answering your exact questions. But I have posted a number of articles related to Insurance on here which I have regarded of interest.

    And, if ANYBODY wants to post questions, I will be happy to answer as best as I can.

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    Gold Member Chrisjan B's Avatar
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    She's a professional photographer.

    BOVER Technologies
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    Email problem Phil Cooper's Avatar
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    I think that explains it...

    Many Insurers will not cover "commercial use" goods under a domestic policy. In fact, many Insurers will repudiate a domestic claim if you operate a business from home, unless you declare it.

    However - if she was to take, say, a small Commercial policy - say just Office Contents of, say, R10,000, and Public Liability (which I would say is critical) - they would happily insure the photographic equipment.

  11. #10
    Gold Member Chrisjan B's Avatar
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    They (Santam) flatly refuse to insure it under any policy at all.

    Outsurance ask her R 500 monthly for R 50 000 worth of stuff, as such only the most expensive and important things insured. Little bit expensive....

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