TL;DR - Our version of "I'm not reading all that, *SparkNotes pls."
- Review and Understand Your Policy: Start the new year by reviewing your insurance policy to ensure it aligns with life changes (e.g., marriage, job change, new car). Understand critical sections like the policy schedule, insuring agreements, exclusions, and claims processes.
- Key Insurance Terms to Know: Familiarise yourself with terms like premiums and excess to better understand your coverage and financial responsibilities.
- Tailor Coverage to Your Needs: Assess significant life events (e.g., having children, moving) and explore additional benefits, like Pineapple’s 30% cash-back feature for driving under 300km per month.
- Maintain and Renew Your Policy: Renew policies on time to avoid coverage gaps, higher premiums, or penalties. Use the grace period wisely to prevent policy lapses.
- Avoid Common Claim Denials: Ensure regular vehicle maintenance, report accidents promptly, avoid unauthorised vehicle use, and keep your insurer updated on modifications and personal information to avoid rejected claims.
We know—it's a new year, and the last thing you want to do is review your insurance policy. Not only that, but you might’ve overindulged a little during the festive season and forgotten what a car insurance policy is.
Don’t worry—we’ll help you out with that. A car insurance policy is an agreement between two parties (you, the policyholder, and an insurer) to pay a monthly premium to cover any damages in case of an incident.
This is why reviewing your insurance policy is essential.
Why, you ask? Stepping into the new year brings many changes. You might be switching jobs, planning to buy a new car, or needing a much more affordable premium—like Pineapple’s, where they start from just R19-ish a day.
Reviewing your policy will help you better understand and tailor it to your needs. So, like an experienced surgeon, let's examine its anatomy.
The Anatomy of an Insurance Policy
A new year allows you to look at things with fresh eyes and to make new year resolutions (we all know how that usually goes). And your insurance policy is no different.
Breaking down the anatomy of an insurance policy begins with looking at what type of insurance your policy covers. The basics usually include car, home, life, and travel insurance. Contacting your current insurer to clarify things will always help if you're unsure.
Once you understand your coverage type, you can delve deeper into your policy documents. Don’t let the intimidating language get to you; we’ll help you decode it bit by bit.
To do so, we need to look at the format of an insurance policy. The basic structure of an insurance policy usually consists of these sections:
- Policy Schedule
- Definitions
- Insuring agreement
- Exclusions
- Conditions
- Endorsements
- Claims process
The policy schedule outlines the insurance policy's details, such as the type of coverage the policyholder bought, the insured people, the period of insurance, the amounts insured for, the excesses that apply, and the premium the policyholder must pay.
In the definitions section, you’ll find the meaning of terms you might not know. In contrast, the insurance agreement outlines what the insurer covers, for example, fire, theft and natural disasters covered under comprehensive car insurance.
Exclusions explain incidents that will not be covered under the policy, while conditions discuss the policyholder's and insurer's duties during the policy's duration.
Endorsements describe policy amendments made by the insurer to accept different riders, items, or coverage under exceptional cases, such as using a car solely for business purposes.
Lastly (phew, we’re almost there), the claims process refers to the steps needed to file a claim. What's a claim, you ask? It's a formal request from a client to their insurer for incidents based on the perils stated in your policy doc.
You should look at this and other definitions to understand your policy better. Our encyclopedia of insurance jargon will help you navigate scary-looking words.
If you thought the fancy words ended here - think again! Here are some other vital terms to look out for that could help you understand what’s going on:
- Premiums: A premium is the monthly fee you pay an insurance provider to have a policy with them. The premium is the cost of maintaining and keeping your insurance policy valid.
- Excess: The amount you must pay when filling a claim before your insurer covers the rest.
These terms are essential for understanding the details of your policy and, more importantly, your coverage.
Looking for an insurer that knows their stuff? Get a Quote
Understanding Your Coverage
Now that you're an insurance expert ask yourself: Does my policy meet my needs, or is it just a costly piece of paper?
Life is never static. Things are constantly changing, and so is the state of your life. You might’ve gotten married, had a baby, moved houses, or all three - lucky you. These factors play a significant part in choosing the best coverage for you.
The policy isn’t the only thing you should look out for. Benefits are like the icing on the cake when it comes to insurance. Sure, you’ll get coverage, but what about a little extra to sweeten the deal?
For instance, Pineapple offers a 30% cash-back refund each time you drive less than 300km monthly through our Drive Less, Get Blessed benefit.
Now that you better understand your current situation and the benefits you want from your coverage, it's time to consider the different types of insurance that will benefit you. You’re probably tired of seeing the word “benefit”.
The different types of insurance you’ll find are usually:
- Car: Insurance that covers your vehicle in case of an accident.
- Health: Health insurance is an agreement in which an insurance company agrees to pay for some or all of your medical expenses in exchange for a monthly premium payment.
- Life: Life insurance involves a contractual agreement between an individual and an insurance company to provide financial benefits to designated beneficiaries upon the insured person's death.
From these different types of insurance, we can build a deeper understanding of the types of coverage found within them.
When dealing with car insurance, it's essential to be aware of the different types:
- Comprehensive cover: This type of coverage covers many risks, including accidental damage, loss due to theft or vandalism, and damage or injury you may cause to another person or their property.
- Third-party cover: also called third-party liability, is all about how you affect other motorists on the road. This insurance policy covers the damages or injuries you cause to others or their property while driving.
- Third-party fire and theft: An insurance policy that covers any accidents where you’re held liable for damages such as fire, theft or injuries caused to a third party.
Your insurance knowledge continues to rise, and because of it, you can now decide which coverage is best for you. This new information can help you navigate the ever-changing landscape of adulthood and pick the best coverage for yourself.
When asked, our claims specialist Lucia added more information regarding what you should be aware of when looking at your policy:
- The/your excess
- Any additional excess that may apply to you
- Car hire
Another critical aspect our specialist mentioned is the clause about inspection regarding excess within an insurance policy.
She said, “They need to check the clause about the inspection because if the inspection is not completed, we apply an excess of 20% of the vehicle’s value. This means that if the damage sustained to the car is less than 20% of the vehicle’s value, the claim will not be paid.”
Make sure to read it carefully so that your claim can be paid out.
As mentioned earlier, major life shifts will determine what coverage you pick. Furthermore, look out for benefits such as Pineapple’s roadside assistance, which you can benefit from if you have a flat tyre battery or lost your keys.
Making the Most of Your Policy
Understanding coverage limits helps make the most out of your coverage, but we must first define them.
Coverage limits refer to the maximum amount an insurer will pay for a covered loss under a specific insurance policy. They are a big part of liability coverage, which is a type of insurance that protects you financially if you are found legally responsible for causing injury to another person or damage to someone else's property.
Pineapple is an excellent example of this (we’d like to think). Our comprehensive car insurance comes with third-party liability coverage in case you’re held responsible for another person’s accidental death or damage to their property.
We pay up to R5 million for third-party incidents when a claim is filled.
Another aspect to consider when making the most of your policy is successfully filing claims, but beware, you might not receive what you expect.
If you’re a Pineapple client, filling a claim via our app/website is easy:
- Log onto the Pineapple app (if your phone has been stolen, you can submit a claim through the webpage).
- Navigate to the claims flow.
- Confirm that you will be honest in all your questions.
- Select the date on which the incident occurred.
- Select the insured vehicle you would like to claim for (should you have more than one).
- Specify the type of incident (theft, accidental damage, vandalism, etc.).
- Submit information explaining what happened.
- Use our Google Maps integration to pinpoint where the event occurred.
- Upload as much supporting documentation as possible or take pictures of evidence.
- If you have a case number, please provide it to us
Finally, review your information and hit submit.
Filling out a claim quickly is excellent, but you can’t do so when your policy ends. It's like trying to refund a burger you’ve already eaten. Failure to renew your policy on time may result in rejecting claims or paying penalties. However, some insurers offer auto-renewals, depending on the coverage.
This is why you must be aware of your coverage's policy renewal stage. This stage is the period when your insurer allows you to renew your policy before it expires. This phase begins towards the end of your current insurance policy.
Remember, your insurer usually offers the option to renew your policy. In this period, the insurer may refine its product offering and alter your current policy.
Auto renews - here are three nice things about your policy being renewed:
- Continued coverage: Renewing car insurance on time ensures no gaps in coverage, and the policyholder is always protected. You’ll be financially liable for any vehicle damage without your renewed cover.
- Cost-effective: A pause or break in your insurance coverage can lead to a spike in your premiums the next time you try to sign up for an insurance policy. A coverage gap implies that you have no recent driving history on record, which could result in being charged with higher premiums.
- Hassle-free experience: Renewing your policy on time makes the process a whole lot simpler. If your policy expires and you fail to renew it, you will have to buy a new policy, which can be more expensive and time-consuming.
Make sure you know what's new compared to what was in the initial policy doc so that nothing material could affect you changes.
Consumer Rights and Advocacy
As a consumer, you have rights that insurers must adhere to. It's essential to be aware of these to avoid being taken advantage of.
One of these is the grace period of your policy during the renewal stage. This is the set time after the premium due date, during which you can make a premium payment without the policy lapsing or getting cancelled.
The process for disputing a claim denial
Filing a claim and having it denied can be quite disheartening. However, we’ll help you with all the back-and-forth you have to do to dispute the denial.
This process goes as follows:
- Contact the insurer: The first step in resolving a dispute or complaint is to contact the insurer directly. You can do this by contacting their customer service department, claims department, or broker.
- Submit a formal complaint: If you aren’t satisfied with the outcome of your discussion with your insurance provider, you have the right to submit a formal complaint to the insurer.
- Contact the relevant Ombudsman: If the complaint is not resolved satisfactorily, you can contact the relevant Ombudsman. The National Financial Ombud Scheme of South Africa (NFOSA) handles complaints related to short-term insurance, such as car and household insurance. In contrast, the NFOSA operates complaints related to long-term insurance, such as life insurance and disability insurance.
- Provide information: To get the help you need, you must provide the Ombudsman with detailed information about your complaint. Be sure to include any relevant documentation and correspondence with the insurance company.
- Investigation: The NFOSA will investigate the complaint and attempt to mediate a settlement between you, the policyholder, and the insurance provider.
- Decision: If both parties can’t settle, the NFOSA will decide based on the evidence provided. The decision will bind the insurance company but not the policyholder.
- Legal action: If you are still unsatisfied with the outcome, the next step would be to take legal action against the insurer.
Rights aren’t the only thing you have as a consumer. Another important tool at your disposal is freedom of choice. Switching insurers can yield additional benefits because of the better premiums (such as the ones Pineapple offers) and favourable add-ons that potentially await you.
You need to be aware of your insurance cycle to make the switch. Most car insurance policies typically last for a year, and your policy documents will clearly state the policy's start and end dates.
Your insurance provider typically sends a renewal notice with updated details of your new premium and any changes to your coverage, if any.
If you’re happy with your coverage, great! But If you are not happy, here are 4 points when thinking about making the switch:
- During a significant shift in your life: Promotions are had, babies are born, and locations are changed. These changes can improve your risk profile or make it worse, e.g., moving to a high-crime area vs. a nice, safe gated community.
- After a premium increase: Perhaps you’re unhappy with your insurer's price hike. Make sure you know exactly what is out there before jumping ship for a cheaper premium. Sometimes it is cheap for a reason.
- Poor customer service: Rude and unhelpful customer service, or no service entirely, can put anyone off, no matter what industry. make sure you go and look at the reviews i.e. on Google, to get a sense of what people are saying based on their experiences with the insurance provider.
- Added extras: Most insurance companies offer extra benefits to add value to your insurance policy. If you find your current policy doesn't provide adequate bonus benefits, this could be the beginning of the end of your relationship.
Before switching, ensure you’re aware of any cancellation T&Cs.
Reducing coverage, incurring cancellation fees, losing loyalty points or bonuses, and creating a gap in insurance coverage are all unpleasant experiences. These could result from prematurely and ignorantly ditching your current insurance provider.
Conclusion
The beginning of the year is usually filled with unattainable New Year's resolutions. While starting pilates every day at 5 a.m. may be out of reach for some, making sure you’re on top of your insurance policy should be easy. You should take time to understand key terms within your policy and how it works to suit your needs better.
Plus, understanding your current life situation (like those significant changes we mentioned) can help you choose the best coverage.
Now that you have this newfound knowledge, you can make the most out of your insurance policy. Furthermore, this understanding makes you aware of your rights as a consumer and what to do in unpleasant situations, such as an insurer denying your claim.
Your new year should start with a better (if not new) understanding of your insurance policy. Resolutions though? That’s a story for another day.
Pineapple won’t leave you hanging in your time of need. Get a Quote!
The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.
Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply.
Team Pineapple
Team Pineapple comprises our company’s top talents, who are dedicated to creating clear, high-quality content on essential vehicle insurance topics. This diverse group, including actuaries, accountants, data scientists, and insurance professionals across South Africa, collaborates to produce enlightening and empowering articles.
Each piece is thoroughly researched, factually accurate, and rigorously reviewed to ensure quality.
*We say they’re the finest because we want them to keep writing for us!
