Skipping insurance premium payments could leave you financially vulnerable, Financial Ombud scheme warns
The National Financial Ombud Scheme (NFO) has warned that skipping insurance premium payments could be very risky for consumers.
Image: Independent Newspapers Archives
As many cash-strapped South Africans are looking for ways to save money, the the National Financial Ombud Scheme (NFO) has warned that skipping insurance premium payments could have devastating financial consequences.
'Everyone's worried about their finances right now, but it's vital that you don't cancel your insurance or default on your insurance premiums,' warned Edite Teixeira-Mckinon, Lead Ombud of the NFO's Non-life Insurance Division.
'It's hugely risky to cancel your insurance, as it is in a time of crisis when you actually need insurance the most.'
Teixeira-Mckinon stressed that while insurers are required to offer a grace period of at least 15 days for consumers to pay missed premiums, skipping payments still poses serious risks.
'Bad financial decisions can come back to haunt you later,' she said.
She highlighted a recent complaint where a motorist was left without cover after missing his March 2024 premium. Despite two attempts by the insurer to collect the payment, one during the grace period, the policy was cancelled.
When the motorist was involved in an accident in April, the insurer rejected his claim, stating there was no active cover.
'The relevance of the March premium is that premiums are paid in advance. The complainant needed to have paid the premium during March to enjoy cover for April,' Teixeira-Mckinon explained.
While some insurers may send courtesy reminders by SMS or email, she said it remains the responsibility of the policyholder to ensure payments are made on time. 'Ultimately, it is the policyholder who must ensure that the premium is paid in a timely manner to enjoy cover in the event of a loss.'
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