How to Recognise Bad Insurance Companies

Unfortunately in the South African insurance industry, as in most industries, where there are good insurance companies there are also bad insurance companies.

The trick, obviously, is to stay away from the 'bad insurers' and stick to the larger, more reputable companies. What we mean by bad insurance companies are generally companies that do not communicate clearly and often enough with their clients.

For example, an insurance company that raises your excess without first letting you know should be considered a bad insurance company. Nobody should have to discover that they have been debited for more than they budgeted for, should they?

Another example of a bad insurance company is one that sells the liabilities of their clients to another insurer, but doesn't inform their clients of this fact. In other words, your current insurer 'sells their book' to another company without first informing their clients.

Then without any notice, the new insurance company increases their monthly premiums and/or excesses. In this case, both the old and the new insurance company are at fault and are 'bad'.

The first insurance company should have notified its clients in advance of the sale of its book, giving its clients the option of changing insurance companies if they so desire.

The second or new insurance company cannot increase a client's premium or excess if a valid contract was in place with the initial insurance company. The only way they can increase an excess or monthly insurance premium is if a client's contract has expired.

However, even then a client must be notified so that they again have the option of changing insurance companies if they so desire. If your insurance company increases your premiums or excess without your knowledge, but claims that they did send you notification, then simply request proof of this notification.