What are the key insurance policy considerations as the year kickstarts?

12 Jan 2024

It is that period where there are many pressing things which preoccupy people’s minds, such as school/university fees, finalising the last errands before heading back to work, etc. Against this backdrop, it is perhaps understandable why this is a period where most insureds are likely to miss sight of critical aspects of their insurance policies. This is further aggravated by the financial constraints that most people grapple with at this time of year. The high cost of living also does not help the situation in any way. It is, therefore, critical to remind the insureds of key considerations when it comes to insurance policies, especially at this time of the year, to ensure that they are not caught off guard should a need to claim arise.

Herewith are the critical considerations:

  • Ensuring that the bank account to be debited has sufficient funds on/by the date on which payment is due.
  • Should there be insufficient funds, consider your policy wording to see what it says regarding the grace period. Alternatively, contact your broker or insurer to seek clarity.
  • Ensure to pay before the expiry of the grace period, failing which your policy terminates automatically.
  • Once payment is made, confirm in writing with your broker or insurer that payment has been made and request written confirmation that payment has indeed been received.
  • Where you pay after the grace period has lapsed, confirm with your broker or insurer whether that payment re-instates your policy. If so, as of when. If it does not, confirm whether it resurrects the policy anew i.e., as though a new policy has been entered.
  • Should you not be satisfied with the number of days stipulated in the policy as a grace period, consider seeking legal advice. The grace periods for both indemnity and non-indemnity policies are regulated by legislation.
  • Check whether the December 2023 instalment was effectively debited. This may seem futile; however, most insurance companies change debit dates for the month of December. This is even more critical in the context of this past December, seeing that the 25th was preceded by a weekend. In view thereof, it is possible that the debit order was scheduled for 3-4 days earlier or later.
  • Lookout for any provisions pertaining to renewals and reassessments. Ensure to comply, if applicable.
  • Lookout for provisions or notifications which may introduce changes to the policy terms.
  • Consider the duration of the policy and whether you are obliged to specifically renew, or it renews automatically. If so, check whether the terms and conditions remain constant after it renews automatically.
  • If uncertain about anything pertaining to your policy, immediately seek clarity from your broker or insurer directly.

Given the fact that there are many things that people are busy with and trying to sort out at this stage of the year, it is quite possible to overlook or miss sight of critical insurance aspects and this can have grave and undesirable repercussions. As such, it is imperative that you, the insured, proactively consider your policy/policies. Although the above list is not exhaustive in terms of the aspects to lookout for, they are among the most important and must be carefully considered.

Article sourced from Adams & Adams.

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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
Mtho Maphumulo

Mtho Maphumulo graduated at UKZN with several distinctions, academic awards and Dean’s Commendation. During this period, he served active leadership roles in many students’ organisations including the Black Lawyers Association... Read more about Mtho Maphumulo


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