Anker Financial Services

As of late, I have been approached by several people with the same issue. They had no insurance but where hit by a third party(third party fault). They approached the third parties insurance to repair their vehicles as they where not insured at the time. All these people tried to submit a third party claim. In every single instance there claim was for better words rejected using legal precedence.

The legal precedence used was “Due care” or “reasonable care” The insurers response to the third party claim

“It is the duty of all users of the road at all times to keep a proper lookout so as to avoid colliding with other road users. The duty of keeping a proper lookout means more than looking straight ahead. It includes awareness of what is happening in one’s immediate vicinity. A driver should have a view of the whole road from side to side and, in the case of a road passing through a built-up area, as well as the pavements on the side of the road” at this point they will argue that even though the person had right of way, they should have excised “Due care” or “reasonable care” in doing so they would have avoided the collision and the wrong doer. So in a nice way they are stating that even though their client is in the wrong and jumped a red robot(Traffic Light) or stop street, the fault lies with the third party for not giving way to or stopping for a law breaking individual. They seem to be way to comfortable trying to shift the blame to the third party that was not at fault.

One of the latest to come to my attention

Without prejudice to our rights and without admitting any liability and only in an attempt to settle this matter, we herewith offer you 70/30% apportionment. Our calculations are as follows-:

Your market value                                                      R26,050.00

Less 40% salvage                                                     R15,630.00

R15.630.00   x 70%                                                    R10,941.00

Our damages    R88,182.00 x 40%                              R26,454.60

R10,941.00 less R26,454.60                                      R-15,513.60

Due to our quantum being high, your client’s claim has attracted a negative figure. We therefor suggest that each party bear his or her own cost.

I am curious why the FSCA, OSTI and the courts have not gotten behind the third parties that are being bullied by the legal department of insurers. What an atrocious act.

Even with all the new laws and by laws trying to govern the affordability aspect of clients. These laws are set up to prevent the public from over extending there finances. Its goal is to keep people with in an affordability range and not over indebted.

“Overextended” transitive verb. : to extend or expand beyond a safe or reasonable point especially : to commit (oneself) financially beyond what can be paid.

Whether its a new car, a house or accounts in general. All creditors have the responsibility to check whether a client can afford the item or account within certain parameters. In most cases the various sales agents are under pressure to make target and even more so to make commission.

A good example is upselling a newer car to client that, The oversight is always the insurance premium. Even if a new car falls within a clients affordability. The points are always an oversight and in most circumstances can push the client out of affordability and into over extended

1. Insurance costs
2. Maintenance and upkeep
3. wear and tare
4. Motor excess

Clients should always be wary of the follow up costs, this has a habbit of rearing its head later down the line.

Assessors and their responsibility

An assessor is appointed to evaluate the accident or the mishap that has affected their insured property. For the property to be assessed and the claim to be filled, it is necessary that your property has a monetary value.

The role and responsibility of a Panel Beater

A Panel Beater, will be responsible for assessing the damages of a vehicle, estimating the cost of repairs, and repairing vehicles to their original condition. Panel Beaters will also be required to liaise with clients.

What is a Bribe

Dictionary definition

verb

1. dishonestly persuade (someone) to act in one’s favour by a gift of money or other inducement.

noun

1. a sum of money or other inducement offered or given to bribe someone.

Do bribes exist between Panel Beaters and Assessors

We all want to be be Naive and imagine the world is perfect. Over the last few years It has been hard to ignore the facts. Assessors tend to favour specific repairers. Now this begs the question, Why does a specific panel Beater get preference over another.

I set out to ask questions and understand if it was just due to a specific panel Beater being Better, Faster, more affordable than the competition. This is were everything goes south. In a few case studies of clients that had claims, The first panel Beater would quote a substantial amount i.e R 80 000.00 . The assessor would be appointed and immediately have the vehicle uplifted and moved to his preferred panel Beater.

Observation

The new Panel Beater quotes around the same figure or value. But they only replace Half to three quarters of the parts. So this begs the question, Where is the additional funds going, Is the assessor receiving a bribe or as one assessor explained to me “A Kick Back” now i would imagine that is the exact same as a bribe. The assessor is receiving payment to favor that specific panel Beater.

The expense of bribe

This is easy to explain. It cost the client money. How does it cost a client money, Well in several ways. 1) If you have a percentage based excess, it could cost you more because of escalated repair costs 2) Higher costs to the insurance cause your loss ratio to be higher, In tern this will cause your annual review to increase your premium 3) If certain parts are skipped and not repaired or replaced it could create issues on the durability and overall life expectancy. 4) It could go as far as impacting any vehicle warranties, motor plans or service plan.

Just a reminder that clients may be at fault from time to time, a good example is where a client tries to have additional work done at the expense of the insurer. All clients should be advised to raise their concerns and be pro active with their claim. no insurer is infallible. That said not all Panel Beaters and assessors are corrupt. The same is said of any broker or insurance agent. The responsibility of a broker or insurance agent, Is to look after both their client and the insurer. Any broker that becomes aware of this practice and remains silent, Is in fact costing the insurer financial losses immediately, the same can be said for the client but only over a bit of time.

How do you distinguish the Right Broker from the wrong Broker??

Well its quite simple.

The Right Broker will not be concerned about the premiums only, They will always be concerned about the accuracy of information 1st. The Right Broker will always look after your best interest and advise you accordingly.

The Right Broker will be by your side and make sure they never Jeopardize you or your cover.

The Wrong broker can cause a lot of issues and indirectly loose you a fortune at the time of a loss. Honesty with insurers is the best policy and will always be to your benefit.

A small misrepresentation from the Wrong broker like omitting the use of a vehicle IE Stating it is used for private use and not correctly insuring for Business use might save you a R100 a month. But at claim stage if a loss adjuster finds the cover to be false or incorrect. It could cause several complications as follows.

1. Policy termination (you will battle to get insurance again)
2. Premium prejudice applied( Insurer may state that you where paying the incorrect premium for your cover and can insist you pay, backdated premiums from inception. this could end up being thousands)
3. Policy voided ( insurer terminates the policy back to inception and returns your premiums. This would leave you to repair your own damages and if a third party was involved potentially have to repair there damages)
4. Be charged with Fraud ( Though this is very seldom the case, it is still a real possibility),

The wrong broker is easily spotted, They seldom spend anytime within your Business or time getting to know you, your family and your circumstances. No two households or two businesses are identical or the same. Every risk must be handled as a new entity and new risk and every aspect of the policy needs to be underwritten correctly.

A change in cover as simple as not disclosing the use of a vehicle will potentially cost you your claim and potentially thousand if not hundreds of thousands of Rands.

Most of us think of insurance as a non essential or as a thorn in the side of our budget. We have other commitments and debts to pay and of course a lifestyle to support. Loads of people don’t like paying monthly premiums as these funds could rather be used to further enhance our lifestyles.

However insurance is and will always be extremely important to your financial well-being. this is due to the fact that covers you from unexpected, sometimes extremely heavy, costs that could be incurred at the time of a claim.

At least once a week I will have a debate with either a friend, client or colleague. With more or less the same idea “But if I save the premiums for a year I can pay my own claims” In a perfect world this might work, But the flip side of the coin has other plans.

Firstly, Saving is hard. Humans by nature have a tendency to spend, it will either be to cover another debt or to buy extra food. The favourite of course is our own guilty pleasures, by buying luxuries, a extra or new TV, the food steamer we saw and bought but never use. It is very seldom that we would actually save the money.

Secondly, even if you are able to save the money, it takes one incident to clear out the savings and still leave you with a short fall. The easiest way to determine if you can save enough would be to ask the following question.

If the average vehicle value is R250 000.00 how long would I have to save to pay for another persons damages. What is my cars value and how much would I need to save up to replace my car. Lastly what happens if there is a liability claim for R1 million. what do I do then.

Insurance is essential unless you have a bank balance of more than a million and dont mind loosing it at any given time.

With the relaxed lock down rules, we see an ever growing spike in the count of Covid 19 cases. In a few short weeks, new cases are escalating to over 10k of new reports daily. The question on everyone’s mind now is “was it worth it”. Was the lockdown laws relaxed prematurely. With all these concerns many are arguing about their rights. How the lock down has negatively effected their livelihood.

Livelihood is bound to be impacted and We have yet to grasp the total and final outcome of this Pandemic. Its at this crucial junction that we need to think of our Kids, their future and how we can save. At current the Country still has loads of uncertainty. There seems to be no end insight and no vaccine on the Horizon.

We can talk about precautions and we can talk about behaviour, Unfortunately it will have no impact. Humans will do what humans do best, Break the rules. What has to be asked is “WAS IT WORTH IT”. If we look at the outcome then no it was not.

Humanitarian crises has significant implications for private business. The coronavirus disease 2019 (COVID-19) has caused a slowdown in trade and disrupted global supply chains, This had changed tourism flows, Business and economic growth. The complexity of world wide economics and the impact it has on every individual both Private and business will only be fully understood as time passes. We are currently seeing the first stages and impact of the Covid Pandemic. We are already in the midst of seeing many family without food, Sole providers taking a cut on salaries and working hours. South African companies that are or have building/built markets on global trade need to be aware of and act on, the vulnerabilities that their trade dependence creates.

 

Insurance is never simple, its never black or white. Insurance is tricky and there is a lot of grey areas. A direct insurer allows you to act as your own broker and write your own policy. Unfortunately if you are not educated or schooled in the insurance industry, It will almost always have a negative effect.

Whereas your broker is skilled and educated within the insurance industry. Allowing your broker to provide you with the best information and advise available. A broker knows the industry and will always look out for your best interest.