FAQ

How do I calculate the replacement value of my house?

When calculating an insured or replacement for your home or any other structure you have insured, the concept of "new for old" applies. A good starting point is taking the average current building cost/sqm and applying this to the size of the insured structure.

What happens if I am under-insured?

If the amount/value you have an item insured for is not sufficient to cover a loss or replacement of the item, your insurer will apply an "average" calculation to determine a settlement amount. Average is calculated as follows:

Amount insured
Actual value X Loss amount = Settlement Amount

What is the difference between a fixed and a variable excess?

A fixed/flat excess remains the same no matter what the amount of the loss incurred. In other words whether I write my vehicle off or have a small "fender bender" I will only ever pay R1000 excess. If a variable excess applies to my cover I will be liable for a percentage of the claimed amount as an excess. There may also be a limit to the minimum amount payable.

If I do not agree with a decision made on a claim I submitted who can I turn to for assistance other than my attorney?

The ombudsman deals specifically with grievances relating to insurance cover. There is an individual ombudsman for short term and life insurance and the procedure to follow when requiring assistance can be obtained from their websites.

Why am I contractually obligated to inform an insurer of a claim before a certain time period has passed?

The main reason insurers stipulate a time period for claims submission is to try and limit the extent of the loss. If the submission of a claim is extensively delayed there may be price increases that would not have been applicable to replacement at an earlier stage. The extent of liable when a third party is involved may also increase with time.

Why do I pay a higher premium when I use my vehicle for business purposes?

When we use a vehicle for anything other than private purposes we automatically increase the exposure of the vehicle to possible accidents or thefts because of the increased time spent on the road. For the insurer to accept the increased risk they need to charge a higher premium.

What is "insurable interest"?

This is the legally recognized financial relationship between the insured and the items he/she is insuring. In order for a person to receive compensation in terms of insurance cover there has to be insurable interest.

What is a "peril"?

A peril is commonly referred to as the direct cause of the loss or damage to or of an insured item. For example: if your computer is damaged by lightning in a severe storm, the peril would be lightning damage.