Insurance blacklisting – know your
rights
No commercial sense to pay out
claims which ultimately push up premiums for everyone else
Making several insurance claims
within close succession can land an innocent party on the
insurance industry blacklist – why does this happen and what are
your rights?
Steve
Zietsman of Santam, SA’s largest short-term insurer says,
“Blacklisting will only occur in cases where it becomes clear
that our exposure to risk becomes unacceptably high due to
failure or the inability of a policyholder to keep risks within
reasonable limits."
"When this happens we sometimes
find it necessary to cancel such a policy, in which case the
insured automatically becomes uninsurable."
“For example”, Zietsman says, “if a
policyholder experiences a legitimate house burglary but it is
suspected that they have ‘padded’ their claim, they become a
‘moral risk’. Their premiums will go up, they will lose their
no-claims bonus and, should suspect claims continue, they will
receive warnings of the repercussions after which they will
become uninsurable."
“If a person has retained a policy
with us for 50 years, with minimal claims, and at the age of 70
becomes involved in two accidents every month, although we will
initially pay out, it becomes apparent that this person is now
too high a risk – they shouldn’t be on the road – and they may
become uninsurable.
“Similarly, if a person lives in an
area with high water levels resulting in frequent flooding of
their home, or in a high crime area against which they are
unable to provide sufficient security, they become a
‘geographical risk’ and may become uninsurable.”
However, acknowledges Zietsman,
should they move to a safer suburb, where flooding or robbery is
less likely to occur, they will once again be able to obtain
insurance.
“We constantly remind policyholders
to take all precautions and care to prevent or minimise loss or
damage to their possessions – if it is clear that this is not
happening – it wouldn’t make commercial sense for us to continue
paying out claims which ultimately push up premiums for everyone
else.”
Zietsman
says even if a claimant has an excellent track record, if there
is a sudden spate of claims, whether petty or large, indicating
recklessness on the part of the policyholder, this automatically
rings alarm bells and we will investigate and cancel a policy if
this is found to be the case.
He adds that it is an insurance
industry obligation to share this information with other
insurers through a central database as a way of preventing
dishonest clients from moving between companies unnoticed, as
well as safe- guarding honest clients from the unnecessary
penalties that result.
“If you work through a broker they
will automatically take up an unjust cancellation with the
insurer, however, if you do not work through a broker, you have
every right to put your argument forward to the insurer directly
or, alternatively, to contact the Insurance Ombudsman on 0860
726 890.
“The Ombudsman is an impartial
mechanism through which the industry ensures policyholders
receive fair treatment and service, and it provides a
fast-acting, readily available port of call for disputes
relating to claims without incurring costly legal fees”, says
Zietsman.
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
