Insurance tips for owners of shuttle vehicles: OSTI

The Ombudsman for Short-Term Insurance (OSTI) has said it often investigates claim disputes where it is found that at the inception of the policy the insured inaccurately disclosed or misrepresented the usage of the vehicle to be placed on cover.

Insurers generally consider vehicle usage as part of their underwriting factors to either determine acceptability of the risk or to determine premiums and other terms and conditions of cover, says the OSTI.

"Some insurers will find certain risks to be unacceptable and others may require that those risks be covered under completely different types of policies. For example, most insurers do not provide cover for fare-paying passengers, while others may require that vehicle used for such purposes be insured under commercial policies instead of domestic or personal lines.

"A consumer may think it is wise to not disclose usage accurately in order to have the vehicle paced on cover or to pay a lower premium, but his would be a grave mistake. If one does not disclose the usage correctly where the insurer does not provide the relevant cover, and there is therefore no consensus regarding coverage, one is as exposed as someone who never bothered in the first place. This is because the insurer would be entitled to declare the policy null and void where it would not have accepted the risk if the correct usage had been disclosed," says the OSTI.

Even in instances where the insurer would have provided the relevant cover but on different terms and conditions, this will likely mean the consumer is left somewhat exposed as it is not likely the insurer will provide full cover if it does at all.

It is therefore a bad idea, says the OSTI, to try and save on premiums by inaccurately disclosing, not only the usage, but any other fact or circumstance, as this may render completely ineffective your effort to procure coverage.

"Insurance cover is about peace of mind, and you will not truly have peace of mind if you have left the policy open to be nullified or voided".

In the case of a dispute over insurance coverage, the OSTI says it can assist in mediation and help find a resolution, and for this reason, it is crucial to be familiar with the insurance contract terms and the parameters it covers.

"Insurance contracts come with a host of terms and conditions, especially when relating to workplace equipment and assets, such as vehicles. These are often glossed over and not comprehensively understood leading to many cases of incidents left without cover. As an e-hailing driver, you'll be using your car for business reasons, so it's important that you insure it with appropriate Business Car Insurance coverage. Personal Car Insurance will not be valid," concludes the OSTI.