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Thread: Insurance: Evil necessity or rip off?

  1. #11
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    2% - 5% that gets added to an investment portfolio,,,by the end of the year the profit percentages look totally different.

  2. #12
    Gold Member Phil Cooper's Avatar
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    Agreed - but would you want to work on a 2% profit margin?

    And if you look at Zurich last year they ended up in the red AFTER investment - and M&F were not much better.

    And the Direct markets make 10 times that! Plus their investment!

    Below is interesting, though

    Durban - In a judgment keenly awaited by motorists and the insurance industry, a Durban engineer has won a battle against his insurance company which refused to pay him out for a car accident because he had not disclosed two previous accidents for which he had never claimed.

    Two years ago Pietermaritzburg High Court Judge Piet Koen ruled that Outsurance’s repudiation of Sherwin Jerrier’s claim for R600 000 for the damage to his Audi R8 Quattro after an accident in 2010 was correct.

    But in a ruling on Tuesday three appeal judges disagreed and, failing any further appeals, Outsurance will now have to pay him for the damages to his vehicle, as well as his legal costs.

    When the Koen judgment was handed down, lawyers warned of the ramifications for everyone, cautioning that consumers carefully read the fine print and report “every little supermarket trolley ding” to insurers.

    At the time, a joint statement issued by the National Treasury, the South African Insurance Association (SAIA) and the Financial Services Board said the judgment would not affect how the industry usually dealt with claims. It said insurance companies undertook not to reject motor car claims on the grounds that customers did not report minor incidences (incidents that were not material to the assessment of insurance risk).

    On Tuesday the SAIA said it needed to study the most recent judgment before it could comment.

    Approached on Tuesday, attorney George Herbst, who acted for Outsurance, said: “I have not been able to study the judgment and to discuss it with my client as yet.”

    “LOOKING FOR WAYS NOT TO PAY”

    In an interview with The Mercury, Jerrier said: “This a great outcome for consumers. It has not been a cheap exercise, but I believed that I was right.

    “Outsurance first alleged that I had been under the influence of alcohol. Then, when they could not prove that, they moved to the non-disclosure issue. It is obvious they were looking at ways not to pay.

    “Since the case and the publicity around it, so many others have told me of their similar experiences with insurance companies. Not everyone can afford to go to court.”

    Judge Koen referred in his judgment to Jerrier’s policy which read: “You need to… inform us immediately of any changes to your circumstances that may influence whether we give you cover, the conditions of cover or the premium we charge … this includes incidents for which you do not want to claim but which may result in a claim in the future.”

    It was common cause that Jerrier had struck a pothole in 2008 and had been involved in an accident with a bakkie the following year.

    He had not claimed for either, but he told the claims handler of both incidents after he put in his R600 000 claim for the third incident in 2010.

    Judge Koen said Jerrier had a duty to report both within the 30-day period stipulated on the policy.

    TRIVIAL INCIDENTS “NOT RELEVANT”

    Jerrier, assisted by advocates Maurice Pillemer and Ryan Naidu, took the matter on appeal to the Natal Provincial Division and on Tuesday Judge Mahendra Chetty, with Judges Rashid Vahed and Thoba Poyo-Dlwati concurring, said the policy in question did not stipulate any ongoing duty to report “incidents” which, because of their triviality, an insured person had sorted out himself.

    And even if it did, this obligation was not set out in any particularity and would result in a “flood of information on entirely irrelevant events” creating general confusion and uncertainty among clients.

    Outsurance, the judges said, was the “self-proclaimed leader” in the market and “prided itself” on saving consumers money by offering premiums based on the exclusion of brokers.

    “It proclaims to ‘say it simply … there is no fine print’ and ‘this is a plain language document… there are no hidden surprises’.

    “Unfortunately it would appear that the wording of the policy is not as simple as it seems… and there is uncertainty as to what was expected of an insured person who may not want to lodge a claim in the hope of preserving his bonus.

    “This is what has given rise to this present litigation,” they said.

    SO WHY DIDN’T HE CLAIM?

    Jerrier had testified that he did not claim for the first two incidents because he believed the claims would be less than his R20 000 excess and he would lose his bonus.

    The judges said Outsurance, in its branding, “you always get something out”, suggested that this bonus was what set it apart from other companies because “you are rewarded for not claiming”.

    “It is therefore not surprising that, in light of the benefits of not submitting a claim and which in any event fell within the confines of the excess he would have to pay, he did not submit a claim.

    “The manner in which the policy is designed positively discourages clients from claiming.”

    Regarding any “change of circumstances”, the judges said unlike other policies, Outsurance policies were not subject to annual renew or annual risk assessment.

    There were no specifics regarding these circumstances and the policy indicated that it related to the insured person’s ability to continue paying premiums so that “good risk clients do not subsidise bad risk clients”.

    “The company, which set out to word its policy in plain language, must to some extent be hoisted by its own petard. The underlying intention of the client was to preserve the reward of a refund… the attraction of this bonus to consumers must not be underestimated.”

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