Short term insurance policies – Five causes for invalidation

In a recent media release, the Office of the Ombudsman for Short-Term Insurance (OSTI) highlights some of the things consumers do which might result in the insurer cancelling cover or refusing to pay out on a claim.

These things also link with the requirements placed on an adviser during the application as well as servicing phase. It’s important to use these tips as conversation points with your clients – guidelines to advise your client on:

1. Providing incorrect details about the regular driver under a motor vehicle insurance policy.
2. Failing to update the risk address.
3. Using the insured property to conduct business when this was not declared to the insurer.
4. Motor and home improvements – poor design and faulty workmanship on a client’s house may result in damage not being covered by their insurance policy.
5. Exaggerating your loss – claiming for an item not owned is the most common type of insurance fraud.

OSTI further advises that clients should read their policy terms and conditions carefully and play open cards with their insurer or broker at all times. Or as the one of the TCF outcomes state: Customers should be provided with clear information and kept appropriately informed before, during and after point of sale.

Click here to download the OSTI media release.

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