Johannesburg - It’s innovative, cheaper, data-driven and rewards good driving behaviour. There’s no paperwork, no broker and no call centre agents asking exasperating questions. One insurer offers cover pause, another ‘pay per k’, while another’s instant sign-up via super-bot promises to get you cover in two minutes, and payout within seconds.
But as insurers rush headlong into technology to keep ahead of their competitors, consumers have been warned that on-demand insurance apps can be risky, especially if the applications process has not been completed to the insurer’s exact specifications.
Ayanda Mazwi, senior assistant at the Ombudsman for Short-term Insurance, says her office has noted complaints about app-based insurance, where consumers have been told their policies were invalid because they failed to upload videos or images of their insured items correctly. And customers allege that their insurers failed to tell them that there was an issue with their cover, despite taking premiums every month.
She said while technology is driving innovation in the sector, customers need to understand what they are letting themselves in for - and the value they are getting.
“These apps place far too much responsibility on the insured, so if customers don’t upload their images exactly the way they are asked to do, or if their device isn’t compatible with the system, then they are told they are responsible for their own cover,” Mazwi said.
It’s important to understand what kind of support the insurer is offering, too, so if there are compatibility issues, the consumer must be alerted and offered an alternative solution, such as being able to take a vehicle for a physical assessment or to complete the application manually.
Mazwi said insurers are obliged to inform customers if there is a problem, but in two recent cases that her office was dealing with, that did not happen.
“In terms of treating customers fairly, insurers should provide customers with an alternative. They need to take responsibility to verify that everything is in order: the insurer also has an obligation to inform the customer.”
Clifford Little’s experience with One Plan, underwritten by Bryte Insurance, serves as a warning about selfies.
He signed up with One Plan through their call centre and was required to complete the application process by taking pictures of his car.
The One Plan website promises that getting insurance cover is as simple as taking a selfie. It also promises no vehicle inspection: “Simply snap a pic of your car, upload to the app and get it covered”.
Customers are told they can increase and decrease their cover, “choose how much you want to pay on the One Plan app”, where you can manage your profile and premium from the palm of your hand. There’s zero paperwork, so apparently “zero hassle”.
Little said on August 10, his brother was involved in a “hit and run” crash while driving his car. Little, who was notified within minutes of the incident, rushed to the scene, where he said the vehicle was undriveable.
“I opened up my email application on my phone looking for the email I received from the insurer with the policy number etc, to look for an emergency contact number I can call them.”
This is where things went south: Not only did the provided emergency number not connect (they were apparently closed due to Women’s Day), but he had to Google Bryte’s contact number to speak to a consultant.
“I explained to her my frustrating situation and gave her my policy number. She did her routine checks and authorised a tow truck to be dispatched to the scene.”
The tow truck arrived, took the vehicle to a storage yard 5km away for an assessment, and the following morning, Little logged the incident with the police to get a case number.
When he called the One Plan claims department, he was told his claim would be rejected because the “images weren’t uploaded”.
Little said he had assumed since the images were “pending verification”, his insurance was in place, and a premium was deducted.
The following day though, the manager informed him that the policy was, in fact, inactive because they never received the images.
Deciding the damage could be easily and cheaply repaired, his brother decided to collect the car from the yard, only to be given a bill of R12 000.
“I completely lost it,” Little said. “The repair costs on the vehicle, R6 000, is not even close to that amount they are charging for towing. How do you dispatch a towing company knowing the customer in question is not covered?”
Don’t expect an emergency call centre agent to verify your insurance cover: Most of these call centres are outsourced, so they do not necessarily have access to customer details.
Bryte though said the policy was only incepted on July 6, 2020, on condition that they receive the first payment and that all the images were uploaded - and validated - by the team.
A spokesperson said while the premium was paid, the images weren’t.
“Our partner, One Plan, did follow up with the customer for the images on six occasions from July 3, 2020, to August 7, 2020, however, had not received these at the time of the incident. The policyholder was made aware that the policy validation was pending, and this meant that they weren’t covered.”
Ordinarily, any claims related to the vehicle would be invalid.
However, upon reviewing the case, they determined that “due to an unfortunate oversight, the service was provided by a Bryte approved agent, (and) as such - without admitting liability - Bryte, hereby, confirms that it will cover the costs - on a full and final basis - related to towing, storage and the urgent release of the vehicle.”
* Georgina Crouth is a consumer watchdog with serious bite. Write to her at [email protected] or tweet her @georginacrouth.