Beware car insurance fine print and gift voucher scams: 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 wasting your insurance premium on the wrong asset?

Many people are paying insurance premiums every month, not realising they are wasting their money as they’ll never be able to claim on the policy.

Nellie was one of them. In 2019 she took out a policy covering the excess payable on her car, which at the time was an Opel Mokka. Last year she bought a new car and unfortunately forgot to inform the insurer. 

A few months ago she had an accident in her new car. “First I updated my details with the insurer and then I claimed my excess,” she said.

“They requested all the relevant documents and then they rejected my claim on the grounds that I only put my current car on the policy after the accident. Is it possible to challenge this?”

Unfortunately not. The car in question was not insured at the time of the accident. The same applies to those who don’t update their cellphone insurance policy details when they get a new phone and end up paying useless premiums for months or years.

It’s really worth taking time to make sure all your insurance policy details are up to date.

Beware the voucher purchase request 

It’s a scam that usually plays on someone’s eagerness to help a colleague, usually a superior.

The target receives an e-mail purporting to come from the boss or senior colleague, asking a big favour of them — that they buy iTunes or Amazon vouchers on their behalf as gifts.

In Grant’s case, his colleague asked him to buy an Amazon gift card for a friend’s daughter as a birthday gift. Luckily the language was very “off” — totally unlike how his actual colleague expresses himself — which was a red flag for Grant.

“I promised to get the card for her today, but I can't do this now because the stores around me are out of stock and all my effort purchasing it online proved abortive,” the impostor wrote.

“Can you get it for me at any nearest store around you? I'll refund you back as soon as possible. Please let me know if you can handle this so I can tell you the amount.”

Grant didn’t oblige, but I’ve heard from several people who have fallen for this scam, one of them buying R11,000 worth of iTunes vouchers for what he thought was his new boss.

Apparently LinkedIn is the scammers’ favourite source of information.

The lesson: don’t buy gift cards on anyone’s behalf without first speaking to them on the phone or in person.  

Make sure you ask this question when shopping around for car insurance

Most insurers don’t require you to name additional drivers on your policy to cover an accident that happens with them behind the wheel. You just need to tell them who drives the car most often — the so-called “regular driver” — and if someone else drives your car now and then, they will automatically be covered, as long as they have your permission and a valid driver’s licence. 

If the regular driver of the car changes, you must inform your insurer to continue to have full cover, or you will lose out at claim time. But some insurers require that you explicitly add additional drivers to your policy to ensure your car remains covered when they are driving it.

These policies are referred to as “named driver policies” and these other drivers that are added to the policy are called “named drivers” or “additional drivers”.

If you lend your car to an unnamed driver, you will not be covered if they have an accident. The premium may be appealing, but the risk of such named driver policies is fairly high.   

GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.

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