Car insurance and Ts&Cs: Wendy Knowler's 'watch-outs of the week'

In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use:

Are you paying too much to insure your car?

If you’re still not driving to work five days a week, you shouldn’t be paying the same to insure it as you were in March last year when SA went into hard lockdown.

But if insurance giant Santam’s statistics are anything to go by, many people haven’t made sure they are benefiting from the reduced risk they pose to their insurers.

In releasing its 2020/21 Santam Insurance Barometer Report recently, Santam said the average consumer was now driving an average of 90km per week, down from 162km pre-lockdown.

The insurer surveyed 400 commercial and corporate entities, 401 consumers, and 150 intermediaries across SA. 

The survey revealed that only 17% of those with motor insurance had adjusted their insurance cover since the start of the pandemic.

“Only 10% of our clients with car insurance have taken advantage of our SmartPark product, which gives them a discounted premium depending on their annual mileage and vehicle type,” Santam said.

“We know that a greater percentage of our clients are working from home and would therefore save on their monthly premium by adding this benefit to policies.”

The insurer conceded that, that could be partly due to the fact that the benefits of SmartPark could have been communicated better.

Interestingly, while claims volumes are down on pre-Covid numbers by about 13%, the average cost of claims is up, despite the easing of lockdown restrictions,

That could be because those accidents that do happen are more severe, Santam says, “because with fewer cars on the road there is more opportunity to speed”.

The Prudential Authority’s motor claims stats – provided by the insurers – reveal that in the second quarter of this year, the claims ratio was 58% – exactly what it was in the first quarter of 2020, before lockdown was imposed, despite reduced traffic volumes now.

That means 58% of total premiums received were paid out in claims.

“We do not believe traffic density is going to return to pre-pandemic levels any time soon for the simple reason that remote working is likely here to stay, at least to some degree,” Santam said.

If that’s your reality, make sure you aren’t still paying a pre-Covid premium - ask your current insurer to adjust your premium or switch to another insurer which has adapted its motor insurance offerings to reflect our changed reality.

What if the Ts&Cs aren’t legal?

So many retailers stay in business despite the fact that their terms and conditions totally defy the Consumer Protection Act. That’s because either their customers don’t realise that, until it's too late, or they don’t care about anything other than a low price.

That’s fine if the product delivers as it should, but if it doesn’t, the cheap product suddenly becomes very expensive.

This week Nicole e-mailed me a photo of the till slip she was given when she purchased goods from a Chinese-owned shop. It has the following words stamped across it: “Sale Items and Lay-bys, No exchanges, no Refounds (sic)”.

“They made me sign their till slip and mine,” she said.

“I told them that this is contrary to the Consumer Protection Act (CPA), but that was lost on them. They simply said it's their policy.”

If a product is not defective, a retailer is not legally obliged to take it back at all. But according to the CPA, if something you’ve bought breaks within six months – and not through any fault of yours – you have the right to return it for your choice of a refund, replacement or repair.

Whether or not it was bought on a sale is irrelevant.

As for lay-by law: if you decide, while still paying for an item you’ve bought on lay-by, that you don’t want or need it any more, the CPA allows for you to cancel the deal and be refunded all payments you’ve made up to that point, minus just 1% of the retail price as a cancellation penalty.

The trick is to find out what a retailer’s aftersales policies are before you pay over your money.

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