Do you know how you are protected when taking out short term car insurance? Remember, you don't have to simply accept what your insurance provider bills you. You have the right to query anything that may seem irregular.

1. Short-Term Insurance Act (Act 53 of 1998 as amended)

• Provides for the registration of short-term insurers.
• Controls the activities and administration of short-term insurers and intermediaries.
• Prescribes financial requirements, solvency, and liquidity.
• Regulates policies and business practices and offers policyholder protection.
• Regulates commissions, premium collection, and claims handling.

What Does This Mean?

As a consumer, you are protected against irregular activity from your short-term insurer and intermediaries. You also have the right to query your monthly premiums if they increase or you experience any other issue with your service provider.

2. Policyholder Protection Rules 2004

In terms of the rules, an insurer must inform the consumer, in writing, of a policy issued to them. The insurer must advise the consumer of any internal complaint resolution systems and procedures. This, as well as full particulars relating to the short-term and long-term insurance ombudsmen. No insurer may ask or induce a consumer to waive their rights in terms of the rules. If they do give any such waiver, it will be regarded as void. No insurer or intermediary may allow a consumer to sign a blank or partially completed form necessary for entering into a policy. If you feel like your insurance provider has not informed you of the above, you can contact the Ombudsman for Short Term Insurance (OSTI). It is recommended to first bring up the issue with your insurance provider, after which you may contact OSTI to resolve the issue.

OSTI Recommends Taking These Steps First:

1. It is usually best to complain in writing. But, if you phone, ask for the name of the person you speak to. Keep a note of this information. Along with details such as, the date and time of your call and what was said. This may be required at a later stage.
2. Remain calm and polite, however emotional, angry, or upset you may be. You are more likely to explain your complaint clearly and effectively if you can stay calm.
3. Initially, attempt contacting the person you originally dealt with. If they cannot help, indicate that the matter will be taken further. Seek details of the name, or job title of the person who will be handling your complaint, and for details of the Insurer's complaints procedure.
4. Attempt taking up the matter with a Senior Official at the Insurer.
5. When you write a letter of complaint, set out the facts as clearly as possible.
6. Write down the facts in a logical order and stick to what is relevant. Include important details like your claim number or your policy number.
7. Keep a copy of any letters between you and the Insurer.

What Happens If You Are Still Not Happy With The Insurer's Decision?

1. Fill in and submit a complaint form to OSTI.
2. Issue a summons out of the Small Claims Court (small cost involved) on the Insurance Company. The maximum amount that can be claimed in the Small Claims Court is R 15 000.
3. Consult with an attorney to pursue the matter by means of further legal action.

3. Financial Advisory And Intermediary Services Act 37 of 2002

This act was introduced to regulate the rendering of certain financial advisory and intermediary services to clients.

The FAIS Act Deals With:

• Regulating brokers as intermediaries and advisors, and includes various other professions.
• The role of the Ombud is explained and formulated.

Subordinate Legislation To FAIS:

• General Code of conduct for authorised financial services providers (FSPs).
• Determination of Fit and Proper Requirements.

It is illegal for anyone who has not applied to the Financial Services Board to be licensed as a financial service provider, to give a consumer financial advice, or sell a financial product. This law protects the consumer from inappropriate financial advice, and consumers can take action if they are given bad advice. If a consumer receives inappropriate advice, or if a financial service provider (FSP) or FSP representative has not followed the proper procedures, the consumer is entitled to complain to the Ombud for Financial Service Providers. A determination by the Ombud is legally binding.

4. Financial Services Ombud Schemes Act 37 of 2004

• Creates a mechanism for statutory recognition of voluntary schemes (long-term insurance ombudsman, short-term insurance ombudsman, and banking ombudsman).
• Determines minimum standards required for recognition.
• Provides for an independent controlling body for each scheme.
• Recognises voluntary schemes.
• Provides consumer recourse by way of holistic, standardised mechanisms for client complaints. This with regard to the financial institutions or services in a procedurally fair, informal, economical, equitable, and expeditious manner.

It is in your best interests to know your rights when it comes to your short term insurance. If you are unhappy with your premiums or how much your monthly fee increased this year, take OSTI's advice and approach your insurance provider to query and break down the exact reasons for your cost. If this can not be resolved, approach the Ombudsman for Short Term Insurance to resolve the matter.

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