I would like to use this thread to understand how insurance works. I've had some misfortune which has resulted in some disagreements with my broker due to my understanding of how insurance works and the actual implementation being different. I'll detail what happened in my next post and will try and update this first post with the answers to the questions I raise.
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How does insurance work?
- Thread starter SafariTin
- Start date
I.am.Sam
Honorary Master
you ask for quotes
you read the fine print
you accept
any mishaps you email or call broker ..based on fine print you get paid out
you read the fine print
you accept
any mishaps you email or call broker ..based on fine print you get paid out
In the last 3 years my claims history was:
2017: Floor polish machine at airport parking passed to close to the back of my car and damaged my bumper
2019: Cyclist coming downhill against the flow of traffic hit my drivers side door as I was turning right
2019: Water pipe burst above kitchen resulting in emergency plumbing and ceiling replacement
2019: Rear ended by third party in company vehicle
To my mind, none of these were as a result of negligence on my part.
These claims have now resulted in the cost to the insurers being about R10k more than what I have contributed in premiums during the life of the policy. This has resulted in the Broker switching my insurance to a different insurer with a resultant increase in premium.
My argument is that in both the cyclist and the rear end claim, my insurance should be recovering the loss from the other parties' insurance and there should be a limited impact on my premium.
To further frustrate me, the old insurance is now requesting that I submit documents to assist them in recovering the funds. If they are successful I will not get any benefit as there is no incentive for them to refund me any of the premiums I paid. There is also no incentive for the new insurer to decrease my premium as they will not get the benefit of the recovery that goes to the first insurer.
As a result I am highly frustrated with the broker in all of this and do not believe that they've added any value in the process.
2017: Floor polish machine at airport parking passed to close to the back of my car and damaged my bumper
2019: Cyclist coming downhill against the flow of traffic hit my drivers side door as I was turning right
2019: Water pipe burst above kitchen resulting in emergency plumbing and ceiling replacement
2019: Rear ended by third party in company vehicle
To my mind, none of these were as a result of negligence on my part.
These claims have now resulted in the cost to the insurers being about R10k more than what I have contributed in premiums during the life of the policy. This has resulted in the Broker switching my insurance to a different insurer with a resultant increase in premium.
My argument is that in both the cyclist and the rear end claim, my insurance should be recovering the loss from the other parties' insurance and there should be a limited impact on my premium.
To further frustrate me, the old insurance is now requesting that I submit documents to assist them in recovering the funds. If they are successful I will not get any benefit as there is no incentive for them to refund me any of the premiums I paid. There is also no incentive for the new insurer to decrease my premium as they will not get the benefit of the recovery that goes to the first insurer.
As a result I am highly frustrated with the broker in all of this and do not believe that they've added any value in the process.
NeonNinja
Neon Resident
Read all the TC's.
Drifter
Honorary Master
You will never get a refund.
mr_norris
Expert Member
I came here to say this. If you are going to pay for insurance, it's probably in your best interest to read the schedule and see what you're actually covered for.
Lupus
Honorary Master
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That is unfortunately how insurance works :-(. I had a ceiling fall down to heavy winds, insurance increases my premiums, someone road into the back of me, premium increased. Only way to not get increase in premiums is to not have claims unfortunately.
Insurance is also based on your profile as an individual.
Sometimes I feel that luck plays a part in our premiums.
All these things that happened to you were no fault of your own, but you could just be an unlucky guy, where unfortunate things happen to you for no reason. As a result your premiums increase.
This may not be true but just feels this way.
Sometimes I feel that luck plays a part in our premiums.
All these things that happened to you were no fault of your own, but you could just be an unlucky guy, where unfortunate things happen to you for no reason. As a result your premiums increase.
This may not be true but just feels this way.
Archer
Honorary Master
In SA it works that way yes. To some extent I can agree with it in that you could be more aware or drive defensively and therefore avoid some of the accidents but on the other hand sometimes the other person is literally 100% to blame and nothing short of not owning a vehicle would've helped you avoid the situation.
Then you get some countries with laws that state that if the accident was not your fault your claim free years remains unchanged.
NeonNinja
Neon Resident
Enforcement.
Wish it was compulsory here... it'd also bring down premiums, those paying for insurance are also paying for those who don't.
I have three cars:
FJ is R950pm
Aygo is R500pm
SJ, 3rd party, is R50pm
I pay R110 a month for third party that's around 1300 a year. Make it a requirement at the time of vehicle license renewals. U buy 1-year insurance and submit it at the time of renewal.
I am sure if everyone takes insurance the price would automatically go down.
NeonNinja
Neon Resident
Some will claim to not be able to afford.
I think at the very least I'm going to change the broker or go without one and insure direct.
I'm also going to look into how other folks self insure. At this stage I am not coming out ahead and losing out on potential interest.
I'm also going to look into how other folks self insure. At this stage I am not coming out ahead and losing out on potential interest.
SaiyanZ
Executive Member
You have many claims in 2019 but no insurer would force you to cancel. They'd just increase your premium until you do. So why did the Broker move your policy to another insurer?
Sounds like a dodgy broker (might not be the case) as brokers usually get upfront commission as well as commission over the lifetime of a policy. So by signing you up with another insurer they probably got a bit of a bonus for the "new" sale.
Also, just submit your docs to the old insurer. They should still pay back your excess if (big IF) they recover the funds. Happened to me a year or so ago where I was paid back my excess a year after leaving the insurer. Accident was a couple years earlier so it took them about 3 years to recover. I had completely forgotten about it and had written it off.
Sounds like a dodgy broker (might not be the case) as brokers usually get upfront commission as well as commission over the lifetime of a policy. So by signing you up with another insurer they probably got a bit of a bonus for the "new" sale.
Also, just submit your docs to the old insurer. They should still pay back your excess if (big IF) they recover the funds. Happened to me a year or so ago where I was paid back my excess a year after leaving the insurer. Accident was a couple years earlier so it took them about 3 years to recover. I had completely forgotten about it and had written it off.