Ladies, read the fine print

The majority of consumers are notoriously bad at reading the fine print on documents, contracts and policies for products and services they buy – often to their own detriment.

A study by a UK-based insurance comparison site showed that more than one million Brits were unable to claim on their home or car insurance in 2008 because they didn’t have relevant cover – even though they thought they did. The study also revealed that women are worse than men at reading the sub-text (and between the lines) on their policies.

“The same could most probably be said of South African women. So many of us buy items and services, including insurance, and sign on the dotted line without really taking the time to read the fine print in order to truly understand what we are buying,” says Robyn Farrell, managing director of 1st for Women Insurance Brokers.

“Insurance policies especially can be complicated so it’s not surprising that many people find themselves in a predicament where they thought they were covered when they weren’t.

“Some people get caught despite reading the fine print, simply because they don’t understand what it means. It is important for consumers to know the ins and outs of their short-term insurance policies and understand the implications.

“This is not only to avoid an unpleasant situation where they find they can’t claim when they thought they could, but also to ensure that they get the most value out of their insurance policy. There are thousands of people forking out money from their own pockets to pay for unexpected expenses which could have been covered by their insurance.”

Different types of insurances products offer different levels of cover and people must be clear what cover they get when they purchase third party insurance versus comprehensive insurance.

All insurance companies have their own rules and conditions with which policyholders must comply in order to be covered and have their claims paid. For instance, insurance companies have procedures and deadlines for submitting claims; some might oblige policyholders to submit their claims within 60 days of an incident while others might prescribe a longer timeframe. Claims submitted after the prescribed timeframe might not be paid.

Consumers must therefore be aware of their insurance company’s rules and regulations so as to avoid non-compliance which could put them at risk of having their claims rejected.

All insurance policies also have certain exclusions. For instance, if a vehicle-owner causes an accident and the tread on their car’s tyres don’t meet South African road regulations, their insurer could refuse to pay their claim. Likewise, if a policyholder’s house or car is broken into but it is found that a window of the car or house was left open or unlocked, there’s a probability that the claim won’t be paid.

“It’s also worth noting that no insurance company will pay claims for losses or damages to your car if you happen to be in an accident while driving under the influence of alcohol or drugs.

“Furthermore, if you tell your insurer that your car is equipped with anti-theft devices and is locked up in a secure garage at night but it’s not the case and you are caught out, your policy could become null and void and you won’t be covered at all,” warns Farrell.

She concludes: “So ladies, take the time to read through your insurance policy; including the fine print. If you are unsure about what anything on your policy means, talk to your insurer and make doubly-sure that you understand. That way you can make more informed decisions when you face an insurance crisis.”