Higher insurance premiums on the horizon - 14 Sep 2009 09:00
The new Consumer Protection Act to be in effect soon, sets out to protect consumers from unfair insurance practices and will most likely increase premiums. Calling on companies for increased accountability to the public, the act will expose insurers who are not explicit enough in their wording of policies and indemnities to many more possible claims from the insured. More claims inevitably relate to higher premiums.
The act will prevent insurance companies from unreasonable policies that are misleading and confusing. By exposing themselves to more claims, insurance companies are at great risk of forking out cash which means they will build their increased liability into your insurance policies which will be reflected in your premiums.
The Consumer Tribunal will be on alert, as watchdog, to enforce certain standards of the act. Consumers should expect a number of rejected claims and defense against their claims in courts.
The act is very wide in application, going so far as to determine the size and language of chain stores indemnity forms. Contracts, though, will still rely on standard wording and exclusions may be in contravention of the act. Insurers do well to realise that the new act serves the interests of their clients, as they should be as well. Any policy that prejudices the insurance company over the insured will likely be tested by the act.
The act follows international standards of plain English and full-disclosure and will come into effect in October 2010. Insurance companies should be readying their policies to align them with the new legislation.
Adapted from Fin24 “Higher insurance costs coming”
The new Consumer Protection Act to be in effect soon, sets out to protect consumers from unfair insurance practices and will most likely increase premiums. Calling on companies for increased accountability to the public, the act will expose insurers who are not explicit enough in their wording of policies and indemnities to many more possible claims from the insured. More claims inevitably relate to higher premiums.
The act will prevent insurance companies from unreasonable policies that are misleading and confusing. By exposing themselves to more claims, insurance companies are at great risk of forking out cash which means they will build their increased liability into your insurance policies which will be reflected in your premiums.
The Consumer Tribunal will be on alert, as watchdog, to enforce certain standards of the act. Consumers should expect a number of rejected claims and defense against their claims in courts.
The act is very wide in application, going so far as to determine the size and language of chain stores indemnity forms. Contracts, though, will still rely on standard wording and exclusions may be in contravention of the act. Insurers do well to realise that the new act serves the interests of their clients, as they should be as well. Any policy that prejudices the insurance company over the insured will likely be tested by the act.
The act follows international standards of plain English and full-disclosure and will come into effect in October 2010. Insurance companies should be readying their policies to align them with the new legislation.
Adapted from Fin24 “Higher insurance costs coming”