Rabia Mayet | rabiamayet@radioislam.co.za

26 September 2024

2-minute read

Despite insurance not being part of the system of Islam, the insurance-lending industry has the potential to affect prices due to insurance claims.

Insurance is a tricky issue with many claims being rejected because the insured often fail to understand the details of the policy and what it covers; and this in turn leads to outstanding claims and disputes within the industry. The biggest pitfall, says Nadia Gamieldien, an insurance expert, comes about when consumers fail to read the “fine print” or clarify any points with their broker.

Amongst the main reasons for claims to be rejected are “policy exclusions” which are liabilities and risks that the insurer is not willing to accept, and which many consumers miss when they sign the terms of the policy. The “fine print” too is a complex issue. There are rules and regulations in place for policies to be in written plain language without much jargon so that they can be easily understood by the consumer. For policies that are entered into telephonically, consultants are required to explain the main points of the policy. Some insurers have even converted English into a more understandable format for people who don’t have English as their first language.

Statistically, a large percentage of motor vehicle insurance claims, with the majority being accident-related claims, have been declined on the basis of exclusions on the policy. These are related to conditions where people don’t take “due care” to prevent or minimize the loss, specifically when a driver is speeding and an accident is caused. Misrepresentation or non-disclosure of some details related to the accident like who the driver was, or misrepresentation about the accident itself, are also factors that result in claims being declined.

Home-owner-related claims, the second highest policy claims, are declined on the basis of the gradual deterioration of the property, wear and tear, lack of maintenance and care, and defects in the structure. Niche policies that include assets, valuable items or even pets that are covered in a specific way, can also result in declined claims when the items are insured at a lesser value than what they are actually worth.

It is important to understand the conditions and terms of the insurance policy, and liase with the insurer to make sure that the cover is adequate. Nadia concluded that “communication with your insurer” is of utmost importance in order to avoid claims being declined.

Listen to the full interview on Sabahul Muslim with Ml Junaid Kharsany.