14 Jun

Insurance companies have often been accused of being fraudulent and “always” trying to find excuses to avoid paying out claims. Often times, these claims are raised when an insurance company refuses to settle a claim on account of exclusions.

What you should understand as a policyholder is that there are circumstances in insurance where certain risks are excluded from cover. These are called policy exclusions or exceptions.

It is important for policyholders to read and understand their policy documents to know about these exclusions so that they know how far they are covered.

Insurance is specific, as such, there are some losses or damages that are not covered by basic insurance policies.

These exclusions can be covered under policy extensions when the policyholder pays more in terms of premiums.

The circumstances where your insurance company might not pay out

  1. Motor Vehicle Insurance
  • Driving under the influence of alcohol or drugs

A motor vehicle insurance policy does not cover the policyholder if it is established that at the time of the accident, the driver of the vehicle was under the influence of alcohol or of any drug.

  • An unlicensed driver

If at the time of an accident, it is established that an unlicensed driver or someone who does not comply with all the conditions imposed on their licence

was driving the vehicle, insurance does not cover any loss or damage arising

from such accident.

  • Using the vehicle to carry fare paying passengers

Insurance policy does not cover a vehicle used for the carrying of fare paying

passengers when the policy indicates that the vehicle is for private use and not for commercial purposes.

  • Unlawful purpose

If the vehicle is being used for unlawful purposes, insurance will not cover any claim arising from it.

  • Political riot and strike

An insurance policy may not cover a loss/damage if the insured event occurs whilst one is participating, involved or as a result of riots, civil commotion, acts of insurgence or insurrections unless there is a policy extension to cover political riot and strike.

  • Accident with an uninsured vehicle

Insurance companies are not liable to pay claims to third party vehicles that are not insured if they are involved in an accident on the road. This is so because in terms of the Road Traffic Act, only insured vehicles should be on the road.

  1. Funeral Assurance policy
  • In the case of a funeral or a life policy, suicide by the policyholder within 24 months from the date of policy commencement or reinstatement is not covered.
  • When a claim arises during the waiting period and is not as a result of an accident, insurance does not cover.
  1. Life Assurance policy

An insurer may not settle a claim when it is established that the policyholder misrepresented or did not disclose material facts in connection with the policy.

For instance, a policyholder who fails to disclose an existing ailment before signing up may not be covered by the policy.

These exceptions or exclusions are written in policy schedules or documents

that are provided when one enters into a contract with an insurance company. Prospective policyholders must go through terms and conditions of a policy before entering into a contract with an insurance company. This helps one to ensure that he/she is fully aware of what he/she is covered against and if one would want to proceed with such a

policy.