1 reviews | Active since Oct 2014
premium increase without valid reason
<p>I took out my policy last year October. I have 2 cars and household contents cover.</p> <p>Yesterday I went online to view my policy and noticed that both car premiums increased by almost R100 each. I immediately called budget to enquire as to why premium would increase on a depreciating value.</p> <p>I was given two reasons. First was that the car is not insured for the total market or retail value but rather the price on parts which have gone up. Second reason is the risk profile that changes.</p> <p>My questions were as follows; Why when I took out the policy I was asked whether I want to insure the vehicle for market or retail value? Why would premiums be based on parts if the replacement value of parts exceed a certain percentage of the vehicle, the insurer opts to write off the vehicle and pays out the client? Meaning parts would not be worth more than the value of the car. I also asked what changed in my risk profile for premiums to increase?</p> <p>I was also told that my household cover increase thus premium on that increased. I told the consultant that I do not want my cover to increase and the value of cover must remain the same. The responsibility see was that the price of things change. I told her that it does not matter. My replacement value is for the cover prices I have currently, irrespective if the current value increased. Meaning I would get paid out for the value I insured it for.</p> <p> </p> <p>With regards to the car, I cannot understand how premium increases on a depreciating amount and how can premium be based on parts rather than the value of the vehicle. I am considering have my attorney look at this in the meantime but wish the budget rectifies this asap.</p>
On the question of what changed on my risk profile, I was told anything can happen.
On the question of what changed on my risk profile, I was told anything can happen.
We can hear that you are very upset regarding the increase that took place on your policy and further note that you are not satified with the response received from our underwriting department.
Kindly be advised that when a policy is reviewed there are a wide range of factors that will be considered in order to determine your new premium. The most common factors range from the current global and local economic conditions to the performance of our currency against global currencies. These factors will have a profound effect on the replacement and repairs of motor vehicles and household goods as a number of these items and components are imported.
To answer your question specifically regarding the fact that your vehicle is insured for a specific value; please take into account that a vehicle is insured against several perils. For example; if you have a minor incident such as a bumper bashing; we not going to pay you out based on the value of the vehicle; our obligation as your insurer is to place you back in the position you were prior to the loss. We will therefore repair or replace the bumper only. The costs involved to repair / replace the bumper includes factors such as ordering the parts (sometimes has to be imported); the cost of the part itself and the labor costs. All these factors are included in the premium.
The above is just one example; we however understand your dissatisfaction in this regard but can confirm that your new premium is correct in terms of our risk rating and fee structures. Insurance premiums increase as do everything else and we would further encourage you to confirm that this is indeed industry norm.
Trust the above explanation offers a more in-depth explanation.
Kind Regards
The Budget Team
We can hear that you are very upset regarding the increase that took place on your policy and further note that you are not satified with the response received from our underwriting department.
Kindly be advised that when a policy is reviewed there are a wide range of factors that will be considered in order to determine your new premium. The most common factors range from the current global and local economic conditions to the performance of our currency against global currencies. These factors will have a profound effect on the replacement and repairs of motor vehicles and household goods as a number of these items and components are imported.
To answer your question specifically regarding the fact that your vehicle is insured for a specific value; please take into account that a vehicle is insured against several perils. For example; if you have a minor incident such as a bumper bashing; we not going to pay you out based on the value of the vehicle; our obligation as your insurer is to place you back in the position you were prior to the loss. We will therefore repair or replace the bumper only. The costs involved to repair / replace the bumper includes factors such as ordering the parts (sometimes has to be imported); the cost of the part itself and the labor costs. All these factors are included in the premium.
The above is just one example; we however understand your dissatisfaction in this regard but can confirm that your new premium is correct in terms of our risk rating and fee structures. Insurance premiums increase as do everything else and we would further encourage you to confirm that this is indeed industry norm.
Trust the above explanation offers a more in-depth explanation.
Kind Regards
The Budget Team