Don't take out insurance under point of sale pressure

By Staff Writer

Consumers should not be coerced into signing-up for any insurance add-ons offered to them when buying goods on credit. Even if insurance is a condition of the credit agreement, consumers still have the right to choose which insurer they go with – they do not have to go with any of those prescribed by the credit provider.

This is advice from Auto & General’s director Angelo Haggiyannes who says that consumers are often persuaded to sign for insurance products at the point-of-sale, and very often these products are costly and don’t actually meet their insurance requirements.

“Consumers are usually offered a range of insurance add-ons when financing goods like TVs, lounge suites, cellphones and expensive appliances through a credit provider. Sometimes, insurance might actually be a condition of the contract and often these products are totally unnecessary,” he says.

Consumers should not be forced to take out insurance with the credit provider’s nominated insurance company or agree on the spot to any of the add-ons offered to them. Instead, they should take the time to evaluate whether or not they really need the insurance products being offered, and if insurance is a condition of the credit agreement, they should shop around for the most appropriate deal at the best price.

Those who already have a comprehensive household insurance policy in place can even opt to add the new items to their existing policy and adjust the sum insured accordingly.

Haggiyannes believes that consumers are often baffled by the fine print in credit agreements, which means they are sometimes unaware of insurance and other hidden costs until they get their first statement.

“Under the National Credit Act, credit providers are actually obliged to tell you about all the costs involved in their credit agreements. So, ask for a full quotation disclosing the full cost of the credit you are applying for. This must include the nature and cost of any additional insurance. You must also insist that these be explained to you. If there is anything you don’t fully understand in the application, you have the right to consult with an attorney,” he insists.

He goes on to say that if insurance is a requirement of the deal and a consumer feels happy to stick with the credit provider’s prescribed insurer, they should first double check which company underwrites the product and whether or not it is an authorised financial services provider.

“Don’t be afraid to ask questions. You have the right to know that the product is underwritten by a registered financial services provider and be assured of receiving objective and impartial advice.

“If you don’t arrange the insurance yourself, you must request on written proof from the credit provider that the item is in fact insured before taking it home. You should also request a copy of the policy,” concludes Haggiyannes.

Recent Articles

Featured Register your customary marriage or lose the right to inherit estate

December is that time of the year when we will see at least one suitor sending his uncles to negotiate the price of his future wife. Lobola, as the bride price is known, has always been an important element of the African marriage.

Read more

Changing from one medical scheme to another - effortlessly

It is coming up to the end of the year and you might be looking to change medical schemes, or options within a scheme in preparation for the new year. While you don’t necessarily have to wait for year-end to do so, providers often recommend it.

Read more

Your guide to financially surviving Christmas

There are a few times each year where you need to dig deeper into your pocket and spend more money such as birthdays, anniversaries, and the Christmas period. Whether you celebrate this religious holiday or not, the festive period - depending on how you choose to spend it - means increased travelling, buying of gifts, entertaining, and eating out at restaurants.


Read more

Trump, Trump and a little bit of South Africa

What a November we had, with the rand staging one of its best months and closing below the R14.00 level. To be honest, this looked like quite a far-fetched possibility at one stage during the month. It seems that the tide has changed a little, even though it might be short lived since the US dollar bulls are not so sure of their case anymore.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Free iCollege Scholarship

Price: R600
When: Until 16 May 2019
Where: Nationwide

Telkom December Big Deal

Price: R459 pm
When: Until 31 December
Where: Nationwide

Money Savvy Kids Giveaway

Price: R450
When: 8 December
Where: Johannesburg (Milpark)