Business

Why your motor insurance may be rejected…

Pension & Insurance Authority Forum with DOREEN KAMBANGANJI
GETTING your insurance claim queried or even rejected can be very frustrating. After all, the reason you want an insurance cover is to ensure you sail through such with ease. But this is not always the case and some motorists have ended up losing confidence in insurance because their claim was rejected for one reason or the other. Reasons for rejection and queries vary and the problem can either lie with the insurer or the insured.
Therefore, today, we will take a look at the most common reasons motor cover claims are rejected and hopefully, the information will help you to avoid the pitfalls that come with motor insurance, and even help you to choose the right sort of insurance policy.
The Insurers Association of Zambia (IAZ) lists the following as some of the main reasons as to why claims get rejected:
1. No cover or expired cover
The most obvious reason is expired cover or lack of cover. Insurance is a contract that also states the period that cover is valid (for example, July 1, 2014 to June 30, 2015). If the individual shows up three months after expiry, he should not raise his hopes that the claim will be settled as the cover would have lapsed.
2. Driving under the influence of alcohol
Driving under the influence of alcohol is not only an exclusion, but it is dangerous and illegal. I remember one late night driver, who, in his intoxicated wisdom, thought that passing over the roundabout made more sense than going around it. Needless to say, his car was no longer in mint condition. Any insurer would think twice before entertaining such a claim. The mantra that says ‘Don’t drink and drive’ can never be repeated too often.
3. Late notification
Most insurance policies state a limit to how much time can pass between an accident and lodging a claim. For example, an insurer may declare 21 days or 30 days as the limit. After that period, it is at the insurer’s discretion whether to entertain the claim or not. It is important to report an accident when it happens, or at least within a few days, even if all the documents are not yet processed, such as the police report. The insurer must always be in the know.
4. Unlicensed driver
This point is in black and white. An unlicensed driver should not sit behind the steering wheel, unless he is a learner driver under instruction and there are clear ‘L’ plates on the vehicle. Even then, there is the provisional licence that all learners must secure before they start their lessons.
5. Undeclared costly modifications (on comprehensively covered vehicles)
This one does not normally lead to a rejected claim, but the pay-out may be lower than what the owner hoped for. Perhaps someone has bought an expensive set of rims. This has to be declared, even if they are added half way through the policy period. Imagine his or her shock when a standard amount is paid as compensation for the costly rims.
6. Change of ownership
If a vehicle changes hands and the new owner has an accident, he cannot rely on the old insurance cover to pay for repairs. As soon as ownership changes, the insurance cover becames null and void. This applies even if there was another month of cover on the old policy. Insurance is tied to the owner, who has what is called “insurable interest” on the vehicle. In the case of property, you cannot insure against your name what you do not own.
There may be other reasons why a claim may be rejected, but generally, the above are the scenarios that keep popping up again and again. We hope this information will help you make informed decisions about insurance and what to expect when making a claim.
Keep in mind that it is extremely smart of you to buy insurance (and in any case, third-party motor insurance is compulsory in Zambia) and it is a practical investment that can save you from many unaccounted-for and sudden costs.
Remember to fulfil your obligations to avoid disappointments. Insurance has rules and these should be followed by both parties.
For more information surrounding issues of insurance and pensions, kindly visit the Pensions and Insurance Authority’s website at www.pia.org.zm. For any contributions or clarifications, kindly contact the Pensions and Insurance Authority on email: pia@pia.org.zm. Telephone: +260-211-251401/5. Fax: +260-211-251492 or your correspondence can be addressed to P/Bag RW 30X, Ridgeway, Lusaka.

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