This is how to boost your chances of a successful short-term insurance claim

With so much insurance fraud doing the rounds, short-term insurers have become very strict when considering claims and therefore consumers have to be very careful to ensure that their claims are successful.

According to the annual report of the Ombudsman for Short-Term Insurance (OSTI), the highest number of disputes, or 42% of overall claims, were about motor vehicles.

“The majority of these complaints were accident-related claims that were declined due to policy exclusions, such as a lack of due care or precaution to prevent or minimise loss, especially where speeding was involved, as well as misrepresentation or non-disclosure,” Tarina Vlok, MD of Elite Risk Acceptances, a subsidiary of Old Mutual Insure, says.

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When are short-term insurance claims for storm damage rejected?

The second highest number of complaints, at 25%, related to homeowners’ claims. “Most of these claims were for damage caused by acts of nature, yet insurers rejected them due to gradual deterioration, lack of maintenance and wear and tear, as well as design or construction defects,” Vlok says.

“What the OSTI report points to is a significant gap in customer education. Many customers do not know what constitutes a valid claim and what is required for a successful claims experience.”

In one of the cases mentioned in the OSTI report, the consumer put in a claim for a collapsed boundary wall. “The homeowner said that the damage was due to strong winds during a storm, but the insurance company disagreed, saying the wall was in bad shape due to weeds and a lack of maintenance.” In the end, the OSTI ruled in favour of the insurer.

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Insurers very serious about rejection claims

Vlok says insurers take rejection claims very seriously. “Each claim is carefully considered to determine whether the loss or damage fell within the ambit of the policy terms and conditions before it is rejected,” she says.

“Short-term insurers need to report their overturn rate, the number of claim rejections overturned by the Ombudsman to their respective boards and therefore, it is in their best interest to keep their overturn rate as low as possible.”

To prevent claims being rejected, there are many things policyholders can do, she says. “Firstly, it is crucial to know exactly what the wording in your policy says. Before you sign it, make sure you read through it carefully.

“Remember that the policy wording, schedule and all correspondence constitute the contract. It is therefore also important to read the schedule. If there is any clause you do not understand, ask your broker or insurance company to explain it to you.”

Secondly, she says, policyholders should regularly review and update their policies. “Review your policy annually or whenever there are significant changes in your life circumstances. This will ensure that you can adjust your coverage to reflect changes in value or risk.”

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Important to adhere to maintenance guidelines

Another important consideration is to adhere to maintenance guidelines, Vlok says. “In terms of vehicle insurance, you must ensure your car is serviced regularly, according to the manufacturer’s recommendations.

“Buildings must be maintained regularly and specific attention must be given to roofs, waterproofing and plants growing next to the property. If there are any significant changes, such as home renovations or modifications to your car, you must inform your insurer straight away.”

Another good piece of advice is to file claims correctly and timeously, she says. Lastly, Vlok recommends talking to your broker if you have any problems. “Your broker is there to understand your policy and coverage. Take advantage of their help and expertise as it will go some way to ensure a successful outcome to your insurance claim.”