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Car Alarms (2008)

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The Ombudsman for Short-Term Insurance says that many claims arising out of the theft or hi-jacking of motor vehicles are rejected by insurers each year on the grounds that the vehicle did not comply with the required security measures stipulated by the policy and a significant number of these rejected claims are referred to the Ombudman's Office. It is thus imperative that consumers acquaint themselves with the specific requirements for theft and hi-jack cover as laid down by their insurers.

The theft of motor vehicles is a major problem worldwide and one of the biggest causes of claims submitted against short-term insurers each year. The theft of cars is often carried out by highly organised and sophisticated criminal syndicates who are well versed in the workings of security devices and measures fitted to motor vehicles to prevent theft.

To reduce the risk of theft of motor vehicles, insurers will frequently insist upon the installation of a car alarm, immobiliser or tracking device. The insurer may also insist that these devices comply with certain standards or specifications for cover to be effective. Should these devices fail through defects or poor installation the likelihood of a vehicle being stolen or permanently lost will be increased.

"Where cover is conditional upon the fitment of specified security or tracking devices the onus is on the insured to ensure that the stipulated devices are fitted within the designated time period and to ensure that they are familiar with the operation of any installed security measures", says Brian Martin, The Ombudsman for Short-Term Insurance. Particular care should be taken to ensure that the right security device is installed and that if the device is to comply with any specification for standards such as VESA, that the device in question meets the standard. VESA is the standard for devices fitted to the vehicle by a party other than the manufacturer whereas VSS rates devices fitted by the manufacturer. Most insurers have accepted the VSS rating in addition to the VESA rating. Generally speaking, vehicles manufactured after 1996 would comply with the VSS standards but should the value of the vehicle exceed a certain limit (usually R250 000) the insurer might insist on the installation of a tracking device.

Where insurance cover is purchased from a direct marketer of insurance products, the Policy Holder Protection Rules promulgated in terms of the Short-Term Insurance Act requires that certain information be furnished to a prospective policy holder prior to entering into a policy which includes a general explanation of the principles of the relevant contract and any information that would reasonably be expected to enable a prospective policy holder to make an informed decision. Any particular requirements or restrictions relating to theft cover should accordingly be properly discussed and drawn to the attention of a prospective policy holder by the insurer, but the onus remains on the policy holder to ensure that there is compliance with the requirements and conditions stipulated by the insurer for cover. "With the high incidents of vehicle theft and hi-jackings in South Africa it is imperative that policy holders fully acquaint themselves with their obligations and regularly check that they comply with the requirements for cover", warns Brian Martin.

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