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Posts Tagged ‘insurance for woman’

Insurance scams seem to be one of the top preferred methods to solve people’s financial problems. What most people don’t realize though, is that insurance companies have ways and means to detect fraudulent claims and when they are suspicious about a claim but can’t prove that the specific claim is fraudulent, it gets referred to an investigations company who more often than not, gets them the proof they are looking for. And sometimes tip offs to the police get the suspects exposed before the insurance company even realizes that the claim is fraudulent.

In Pietermaritzburg recently, a woman reported her car stolen after a night out. According to Police spokesperson Captain Thulani Zwane, the woman claimed she parked her car at the venue at 20:00 and didn’t notice anything or anybody suspicious. She claimed the car was properly locked but when she returned two hours and fifteen minutes later at 22:15, the car was gone. She looked around and asked people in the area if they had seen anything but nobody had any information.

Captain Zwane said the police started an investigation but before they had any substantial information they were tipped off about a suspiscious looking car parked at Emboyi, near the Mkhambathini area. Upon investigation it was found that the vehicle had no registration plates. Police confirmed that the car was stolen by checking other details and after further investigation a  29 year old man was arrested.

Car-Insurance-ScamHe claimed that a woman asked him to take her car and burn it because she wanted to claim from the insurance. The amount of money he was paid to do this for her is unknown. He decided to not burn the car but instead keep it for himself and removed the number plates. He planned to hide the car for a short period of time before replacing the number plates but before he could do it the police was tipped off and the vehicle was found to have been reported stolen. To protect himself he told police that the owner of the car wanted the car burnt so she could claim from insurance.

Upon further investigation it was found that the woman had financial difficulties and was indeed planning to submit a fraudulent claim. The value of the car was around R65 000 (sixty five thousand Rand) and the money would have helped her to get out off financial trouble.

The two will appear in court shortly but one wonders if it is even worth prosecuting them as the punishment for fraudulent insurance claims are not harsh. Taking into account the average sentences for short term insurance fraud range between R10 000 (ten thousand Rand) and R20 000 (twenty thousand Rand) or between 2 (two) and 4 (four) years in prison which is often wholly suspended, it is clear that punishment is most definitely not harsh enough to act as a deterrent to the perpetrators of these crimes.

The South African short term insurance industry estimated an annual loss of around R6 billion Rand per year as a result of fraudulent claims. These losses have to be recovered from somewhere and the logical route would be to increase premiums which in turn punishes innocent people. Is it not time that we start looking at harsher sentences for convicted perpetrators? Is the lack of proper punishment the result of more and more people looking at insurance fraud as a way of income?

It surely seems that it is an easy way to acquire cash as only a few of the perpetrators are actually prosecuted and of those prosecuted and convicted, most receive very light sentences or prison sentences are wholly suspended.

The argument that these crimes are committed by perpetrators battling to survive is not valid either, because statistics revealed that  people from all walks of life are involved. From accountants, lawyers and doctors to the working class.

The obvious solutions to stop or even minimize faudulent insurance claims are to firstly educate the broader public to understand the importance of reporting any suspicious activity around claims, as well as to give out much, much harsher sentences to convicted perpetrators. Only if examples are made of a few, will the rest take notice.

Staying with the theme of rights, do women have the right to lower insurance premiums by sole virtue of their gender?

Pity the man who drives with care and caution, because his insurance company will load his premium anyway.

That’s because claim statistics reveal that men, especially young men, are more likely to be involved in an accident, and the repair bill is likely to be higher than that arising from a car accident claim submitted by a woman driver.

As was recently reported, the European Court of Justice has ruled that from December 2012, insurers in the UK can’t practise gender discrimination by charging men higher premiums than women. While that ruling is not binding on South African insurance companies, it has caused major ripples because our industry tends to follow trends in the UK and Europe.

1st for Women is determined to stick to its business model, and the statistics which underpin it.

“1st for Women stands by the fact that, statistically, women are lower insurance risks than their male counterparts,” said managing director Robyn Farrell.

“They take fewer risks, make more careful decisions, usually stick to the speed limit and frown upon road rage.

“The insurance industry as a whole differentiates but does not discriminate.

“Discrimination implies an arbitrary distinction that is not based on merit whilst differentiation is a distinction based on merit.

“The entire insurance industry differentiates in terms of age, gender, geographical location, years of insurance and licence period.”

Not surprisingly, the SA Insurance Association (Saia) has also come out in support of “differentiation in insurance premiums to benefit low-risk consumers”.

Saia’s legal manager, Suzette Strydom, said insurance premiums were based on risk – the higher the risk, the higher the premium.

The constitution outlawed “unfair” discrimination, but discrimination which “reasonably and justifiably differentiates between persons according to objectively determinable criteria, intrinsic to the activity concerned” was defensible, she said.

In other words, there’s solid evidence that women are generally lower risk when it comes to car claims than men.

“In the South African insurance industry, the interpretation has always been that in the event that an insurer can show, with statistics, over a particular period of time, that the claim ratios confirm an increase in and an exposure to risk as a result of age, gender, location or other factors, the premiums will be determined accordingly,” Strydom said.

Age also played a major role in determining car insurance premiums.

“Drivers between the ages of 18 and 25 are three times more likely to cause an accident,” she said. “It is unfair to expect pensioners, for example, to subsidise younger drivers.”

The other factor which influences your car insurance premium is your claim profile – lodge a claim and your premium may well increase afterwards, in keeping with your increased risk status.

So it stands to reason that if you haven’t claimed on your policy for some time, your risk diminishes and your premium should too.

But this doesn’t happen automatically – you have to ask.

In January I got the usual letter from my insurer, telling me that my monthly premium was about go up because of increases in the cost of labour repair rates, vehicle parts and the like.

I was told that my monthly premium, which includes household insurance, was going to increase by a whopping R564 a month.

So I made a call to my insurance company, pointing out a few facts: that while car parts and labour have gone up in most cases, the value of the two cars in question had significantly decreased; that we do relatively low mileage, and that we hadn’t made a car claim for many years.

Within minutes, I was offered a new deal.

Instead of going up by R564 a month, my existing premium went down by R244 a month, so that call saved me more than R800 a month.

Car Insurance Comparisons
If you’re in a similar position, make that call. –

By Wendy Knowler, Pretoria News

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