Car warranties sold as car insurance - 22 Jul 2010 16:11
Be careful of motor vehicle warranties being punted as an insurance product, warned the Ombudsman for Short-term Insurance (OSTI) this month. Many dealers are marketing warranties as insurance policies, but when it comes time to claim, policyholders realise they’re not covered.
Drivers must read all the small print and acquaint themselves with their warranties to determine where it falls short of an insurance policy and supplement it with a policy that is actually underwritten. Drivers should also question their dealers to determine the extent of the warranties coverage. More often than not, these types of policies and warranties do not cover the driver’s needs.
If the warranty is an insurance policy, it must be underwritten by a registered short-term insurer, notes the Ombudsman. Ask the dealer or car manufacturer who underwrites the policy to determine if it’s legitimate. The office of the Ombudsman has received complaints as a result of
repudiated claims from policyholders who had no real insurance policy.
The OSTI led an investigation which showed that many of these insurance policies were no more than a contractual agreement between the dealers and the owners of the vehicles, which he cannot take action against.
Such consumers are now disgruntled at their lack of recourse and poor legitimacy of their claims. The matter has been sent to the Financial Services Board (FSB) for review.
Be careful of motor vehicle warranties being punted as an insurance product, warned the Ombudsman for Short-term Insurance (OSTI) this month. Many dealers are marketing warranties as insurance policies, but when it comes time to claim, policyholders realise they’re not covered.
Drivers must read all the small print and acquaint themselves with their warranties to determine where it falls short of an insurance policy and supplement it with a policy that is actually underwritten. Drivers should also question their dealers to determine the extent of the warranties coverage. More often than not, these types of policies and warranties do not cover the driver’s needs.
If the warranty is an insurance policy, it must be underwritten by a registered short-term insurer, notes the Ombudsman. Ask the dealer or car manufacturer who underwrites the policy to determine if it’s legitimate. The office of the Ombudsman has received complaints as a result of
repudiated claims from policyholders who had no real insurance policy. The OSTI led an investigation which showed that many of these insurance policies were no more than a contractual agreement between the dealers and the owners of the vehicles, which he cannot take action against.
Such consumers are now disgruntled at their lack of recourse and poor legitimacy of their claims. The matter has been sent to the Financial Services Board (FSB) for review.