Christelle's blog

For many clients, their motor vehicles are an extension of their homes – a place where they feel safe and comfortable. As a result, it is a common mistake made by many to simply leave certain belongings in the car overnight believing that they will be safe until the morning.

 

According to a recent survey conducted by Allianz Insurance, drivers in the UK leave up to £3-billion worth of belongings in their cars overnight. Even more worrying, over half of these drivers do not lock their car while they are sleeping. In South Africa, we tend to be far more cautious on the issue of theft and safety, as a result of our high crime rate. However, the reality is that many clients do still leave belongings overnight in their vehicles, and sometimes on full display to potential burglars.

 

At MUA, we receive a number of claims for items that have been stolen from our client’s motor vehicles. In fact, these claims have increased markedly following the recent criminal ‘trend’ of thieves interfering with the remote control locking of vehicles, an issue I raised in a recent RISKSA column. Motorists press their remotes believing they have locked their vehicle. However, interference – deliberate or otherwise – by third party remotes being pressed at the same time reportedly interferes with the locking process leaving the vehicle open and exposed to petty criminals.

 

The problem for the insurance industry in these cases is that signs of forced entry are usually required by the insurer in order to show that the vehicle was broken into. If there is no sign of forced entry then the insurer must work on the assumption that the client simply failed to lock the car. In doing so, any claim would be rejected as the client failed to act with due care and diligence.

 

The advice may not be new but it is certainly worth repeating. Clients must ensure that when they leave their vehicle it is securely locked. If this involves going back to the vehicle to double check, then advise them to do so as failure to do this may leave them at risk of having a claim repudiated.

 

Often, the types of claims that would arise from belongings being left in a vehicle are small items such as sunglasses, GPS navigation systems, iPods, laptops and bags with personal possessions. However, while these items may be small they can often prove very expensive to replace.

 

It is also advisable to remind clients that unless belongings that have been left behind in a vehicle were hidden from view, it is highly likely that such a claim may be repudiated. In South Africa especially, terms and conditions stipulated by most insurers insist that belongings not be left on display.

It is also important that clients are made aware of the fact that this general restriction often applies regardless of whether the client has unspecified all risks cover in place, as such a theft would be seen as negligence on the part of the client.

 

In order to ensure that a claim will be covered most insurers will insist clients keep items left in an unoccupied car within a locked compartment such as a cubby-hole or boot. If the vehicle does not have a boot in which bigger items may be stored away, then it is possible that an additional excess will also apply.

 

The best advice, however, is to ensure that any expensive and/or sentimental belongings are not kept in a vehicle at all. The next time you do speak to your client, it may be an idea to ask them to consider what items they regularly leave in their vehicles overnight and explain to them the risks of doing so.

 

Please visit the MUA poll on the RISKSA website to complete the anonymous questionnaire about whether you or your clients have ever left expensive belongings in a car overnight. The exciting results will be revealed in a few weeks via the media and newsletter. To complete the poll visit www.risksa.com

 

The introduction of Aarto (Administrative Adjudication of Road Traffic Offences Act) and the consequent points demerit system is scheduled for 1 April 2011 following pilot projects in Johannesburg and Tshwane. 

 

Under Aarto, all motorists will be given 12 points to start with and will lose points when they commit traffic offences. This will be reflected on the National Contravention Register on eNatis. More points will be lost depending on the severity of the offence, which could eventually lead to the suspension of one's licence.

 

Key points to remember:

 

 

 

 

 

 

 

This is particularly evident within the competitive personal lines insurance market where it has become increasingly important for brokers to identify a chosen niche in which they are comfortable and use these skills and expertise to grow their portfolio. Effective segmentation of a client base also translates directly into improved sales figures and a higher retention of clients. 

 

By segmenting clients and maintaining a focus on a specific niche, brokers can extract the maximum benefit out of their network; establishing themselves and their business, as experts in a particular field; and can start attracting a similar breed of clients, thereby resulting in increased revenue. 

 

Establishing this niche market not only means that marketing and sales efforts are more focused and ultimately more successful, but also that clients are far less likely to move their business if they feel their needs are properly understood.

 

We see this frequently with brokers who specialize in a particular service offering. For example, a broker who specializes in thatch insurance will be far more equipped to understand the risks of their clients and be able to advise them appropriately.  A broker who understands the unique needs of thatched roofed home owners will also be able to provide a client with specialist advice from the time of taking out the policy right through to the event of a fire claim.  Such brokers are also more likely to know the thatching companies and to strike up a relationship for new business referrals to ensure they build a sustainable source of new business leads. 

 

At MUA we have seen this work for a diverse range of client segments.  Some of the top performing brokers are those who have chosen niches such as foreign clients owning homes in SA, high value property home owners or exotic car owners.  These brokers then customise their insurance offerings to suit the needs of their clients. 

 

In addition to the obvious sales benefits of catering to a niche client base, the insurance industry – brokers and insurers alike – will soon be obliged to change the manner in which we conduct our business to be customer-centric through initiatives such as the Treating Customers Fairly (TCF) principles launched by the FSB. 

 

With the opportunity that a specialized service offering presents, there are also challenges that brokers need to be cognizant of. However, it is important to realize that challenges posed by a particular niche can actually prove to be a strength for a business and form an important part of a broker’s strategic differentiator. 

 

For example, high net worth clients demand personal attention and very quick turnaround times, particularly on claims.  Gearing your business model to be able to meet these needs provides an opportunity once again to differentiate your service offering from others around you.

 

In a world where every aspect of business has become increasingly more compartmentalised and focused, it is vital that brokers meet these changing needs. Those brokers who understand the value of having a truly niche approach are certain to reap the benefits.

 

Insuring jewellery against loss or theft is commonplace in South Africa. Unfortunately most consumers are unaware that the onus to insure their jewellery at accurate replacement values rests on their own shoulders.

 

Dex Kotze, CEO of Jenna Clifford Jewellers, says the replacement value at which one needs to insure their jewellery is directly linked to the Rand/Dollar exchange rate. The reason being that gold trades internationally in dollars and the price fluctuates on a daily basis.

 

“Over the long term, diamonds and other precious gemstones have proven to increase considerably in value and it is vital for the insured to guard against underinsuring assets that generally have an emotional attachment linked to them due to the receiving of jewellery as a gift from a loved one, which later becomes a family heirloom,” says Kotze.

 

In order for an insurer to replace an item, an authentic valuation document is required. Reputable jewellers will only issue jewellery valuations based on actual selling prices of items. Unfortunately the retail industry is rife with some retail merchants who mark up valuations to counter the discounts passed on to insurers.

 

Kotze says brokers and insurers should guard against the following when assessing a client’s jewellery valuation: