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How to avoid your truck insurance claim being repudiated

27 July 2010 Heavy Commercial Vehicle Underwriting Managers (Pty) Limited (HCV)

Heavy commercial operators may be in for a financial shock when making a claim. They may not realise that if they do not comply with certain policy fine print, their claims can and will be repudiated. Client loyalty is no longer a factor for most insurance companies as they are constantly searching for ways to cut costs and keep premiums low. The following tips will help heavy commercial operators to minimise their risk of insurance claim repudiation.

Operators are urged to inform their insurance company of any planned vehicle modifications. The terms and conditions of their policy may state that the vehicle must comply with the manufacturer’s specifications. If a vehicle is “chipped” or modified without the insurer’s consent, it gives the insurer a valid reason to refuse to pay a claim if the vehicle is involved in an accident.

Policy fine print also requires that the vehicle is roadworthy, therefore regular maintenance is crucial. For example, incorrect tyre pressure not only renders a vehicle unroadworthy but can also be very dangerous. It affects braking, steering, road holding and the general stability of the vehicle. Operators should check tyre pressure on a regular basis to reduce the risk of having an accident. Simple maintenance procedures like this will prevent repudiation.

Driving under the influence of drugs or alcohol is grounds for repudiation. Studies show that alcohol hinders a driver’s psychomotor skills (movement controlled by the brain). Operators are advised to make it very clear to drivers that they can be instantly dismissed if they drink and drive. If a drunk driver causes a fatal accident, not only will the insurance claim be repudiated but manslaughter lawsuits may be filed. The operator will suffer severe financial losses and have the death of innocent road users on his conscience. Similarly, drugs can affect the driver’s ability to control the vehicle safely. Prescription drugs are just as dangerous as recreational drugs.

A photocopy of the driver’s Professional Driver’s Permit (PrDP) is not sufficient to protect the operator from repudiation. The driver may have been previously disqualified which means the operator has employed an unlicensed driver. By regularly checking licenses, operators can ensure the vehicle’s insurance is not invalidated.

Before going on cover, operators should research the repudiation history of their chosen insurer. “Many underwriters distract consumers with no claims bonuses and value added benefits, without mentioning their reluctance to pay out when a claim is made,” explains Chris Barry, MD of Heavy Commercial Vehicle Underwriters (HCV), an underwriter renowned for an incredibly low rate of repudiation.

Operators are encouraged to ask questions about their contracts to make sure they understand all the fine print. “HCV has made policy wording easy to understand so that our policyholders know exactly what we expect from them to ensure their policy is valid at all times,” assures Barry.

If operators follow the terms and conditions of their insurance contract, repudiation is unlikely. Should a situation arise where the operator disputes the repudiation of a claim, they can contact the Insurance Ombudsman to investigate the situation.

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