Short - term insurers warned

Short - term insurers warned
Published: 12 November 2013
Short term insurers have been warned against engaging in unethical practices that could be detrimental to the industry.

Mr Pupurai Togarepi from the Insurance and Pensions Commission told delegates attending the Insurance Institute of Zimbabwe's annual conference that is underway in Victoria Falls that the Commission was concerned about the situation where some short term insurers were now specializing in third part insurance at the expense of comprehensive insurance.

"Some insurance companies are selling this third party insurance to clients without clearly advising them on what the insurance cover entails and this is creating problems when it comes to claims.

"In most cases we have had to explain to the client about the cover they bought. We want insurers to go back to basics and to be ethical in their conduct," he said.

Third party insurance is a motor vehicle cover that only covers a third party and not the insured while comprehensive cover takes care of both the third party and the insured.

He added that the practice has also resulted in undercutting of pricing where there are various prices for the same product.

"We have heard of various figures from $25, $30 and $35 for third party insurance what then is the appropriate price that will allow you to offer adequate cover?" he asked.

Apart from undercutting on rates Mr Togarepi said they were also concerned about the aggressive vending activities by agents representing some insurance companies mostly at post offices and other outlets that sell motor vehicle licences.
- herald
Tags: Insurers,


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