Policyholders Warned of Potential Insurance Pitfalls

July 1 - Too many South Africans realize too late that they will not be paid out fully by their insurance companies when they thought they were properly covered.

Insurance policyholders should be aware that there are pitfalls and try to avoid them at all costs.

Car Insurance

Policyholders should ensure that their gear locks are Vesa (Vehicle Security Association of South Africa) approved as most insurers will refuse to pay out for a stolen car if not.

Limiting cover for major parts in car insurance policies means that replacement costs usually exceed what customers are covered for - meaning that they will need to fork out the difference above the limit set.

Househol Insurance

It is imperative to update insurance policies to keep them in line with the true value of a home. A house that cost R100K a decade ago, could easily be worth R1 million. However, if insurance was taken out 10 years ago, that is the value that will be paid out if, for example, the house burns down.

The need for security gates and proper security systems is essential in order to be paid out.

"A good broker will highlight these factors and constantly remind clients to update policies," said Steffen Gilbert of Santam.

"A lack of security gates and burglar bars or dysfunctional security systems are yet more factors that lead to claims not being paid out, accounting for three percent of the claims we receive."

The bottom line is for policyholders to remain consumer savvy and remember to ask all the questions they can think of, while choosing brokers they can trust, warn the experts.