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Insurance Abstract
An insurance product, a method of insuring an article and an a method
of compensating an insured person. The insured article is, in particular,
a vehicle, motor bike or boat. An insurance product is provided
comprising a policy whereby the insurer undertakes to compensate
an insured person for a loss incurred as a result of the actual
consideration obtainable by the insured person for an article being
less than an agreed minimum consideration, when the insured person
disposes of the article. The compensation is for the loss incurred
as a result of the diminution in the value of an insured article
due to the article having been damaged in an accident, notwithstanding
that the article was competently repaired after the accident.
Insurance Claims
1. An insurance product comprising a policy whereby the insurer
undertakes to compensate an insured person for a loss incurred as
a result of the actual consideration obtainable by the insured person
for an insured article being less than an agreed minimum consideration,
when the insured person disposes of the insured article.
2. An insurance product as claimed in claim 1, in which the insured
article is a motor vehicle.
3. An insurance product as claimed in claim 1, in which the compensation
is for a loss incurred as a result of a diminution in the value
of the insured article due to the insured article having been damaged
in an accident, notwithstanding that the insured article was competently
repaired after the accident.
4. An insurance product as claimed in claim 3, in which the compensation
is in respect of the whole of the loss.
5. An insurance product as claimed in claim 1 in which the minimum
consideration is an average price for articles of the same kind
as the insured article, as determined by an independent party.
6. A method of insuring an article which includes undertaking to
compensate an insured person for a loss incurred as a result of
the actual consideration obtainable by the insured person for the
insured article being less than an agreed minimum consideration,
when the insured disposes of the insured article.
7. A method of insuring an article as claimed in claim 6 in which
the compensation is for a loss incurred as a result of a diminution
in the value of the insured article due to the insured article having
been damaged in an accident, notwithstanding that the insured article
was competently repaired after the accident.
8. A method of insuring an article as claimed in claim 6 in which
the minimum consideration is an average price for articles of the
same kind as the insured article, as determined by an independent
third party.
9. A method of compensating which includes compensating an insured
person, when the insured person disposes of an insured article,
for a loss incurred as a result of the actual consideration obtainable
by the insured person for the insured article being less that an
agreed minimum consideration.
10. A method of compensating an insured person as claimed in claim
9 in which the compensation is for a loss incurred as a result of
a diminution in the value of the insured article due to the insured
article having been damaged in an accident, notwithstanding that
the insured article was competently repaired after the accident.
11. A method of compensating an insured person as claimed in claim
9 in which the minimum consideration is an average price for articles
of the same kind as the insured article, as determined by an independent
third party.
Insurance Description
TECHNICAL BACKGROUND
[0001] This invention relates to an insurance product, to a method
of insuring an article and to a method of compensating an insured
person. The article may, in particular, be a vehicle, motor bike
or boat.
[0002] Existing insurance products for motor vehicles typically
provide that should an insured vehicle be damaged in an accident
and the cost of repairing the vehicle be less than the value of
the vehicle, the insurer undertakes to repair the motor vehicle
or to pay for the reasonable cost of repairs. However, when the
insured subsequently disposes of the repaired vehicle, which would
be many months or even years later, he often finds that he is unable
to obtain the usual market price for that kind of vehicle because
of the fact that the vehicle has been involved in an accident, notwithstanding
that the vehicle was competently repaired after the accident. The
insured has accordingly suffered a loss as a result of the accident
for which he has not been indemnified. The invention aims to indemnify
the insured against such loss.
DESCRIPTION OF THE INVENTION
[0003] According to a first aspect of the invention there is provided
an insurance product comprising a policy whereby the insurer undertakes
to compensate an insured person for a loss incurred as a result
of the actual consideration obtainable by the insured person for
an article being less than an agreed minimum consideration, when
the insured person disposes of the article.
[0004] The article may, in particular, be a motor vehicle.
[0005] The compensation may, in particular, be for a loss incurred
as a result of the diminution in the value of the insured vehicle
due to the vehicle having been damaged in an accident, notwithstanding
that the vehicle was competently repaired after the accident. This
is also known as "diminished value".
[0006] The compensation may be a whole or partial indemnification
of the loss.
[0007] The actual consideration may be a sum of money or may be
a discount granted by a dealer in respect of the purchase price
of another vehicle when the insured person trades in the insured
vehicle.
[0008] The minimum consideration may be an average price for vehicles
of the same kind as the insured vehicle having regard to, inter
alia, the make, model, age, condition and extent of use of the insured
vehicle.
[0009] The average price may be that determined by an independent
party.
[0010] The insurance product may provide that until the average
price becomes available, the liability of the insurer shall be limited
to a percentage of the retail value of the insured vehicle when
new.
[0011] The insured person may pay to the insurer a premium by way
of a series of payments or a single payment.
[0012] The insurance may only be effective after a predetermined
time period, and may endure for a further predetermined time period.
[0013] The area in which the insurance applies may be limited.
[0014] The insurance product may stipulate that the vehicle must
be new at the time when the insured person acquired it.
[0015] The insured person may be obliged to maintain the article
in a satisfactory manner.
[0016] The insurance product may stipulate that repairs are to
be effected by authorised repairers.
[0017] The insured vehicle may need to be disposed of in an arm's
length manner.
[0018] The insured person may be obliged to sell or trade in the
insured vehicle to a predetermined person or class of persons.
[0019] The insured person may be obliged to obtain a specified
number of quotations from different dealers for the values at which
the dealers are prepared to purchase or exchange the insured vehicle.
[0020] According to a second aspect of the invention there is provided
a method of insuring an article which includes undertaking to compensate
an insured person for a loss incurred as a result of the actual
consideration obtainable by the insured person for the insured article
being less than an agreed minimum consideration, when the insured
disposes of the insured article.
[0021] According to a third aspect of the invention there is provided
a method of compensating an insured person, when the insured person
disposes of an insured article, for a loss as a result of the actual
consideration obtainable by the insured person for the insured article
being less than an agreed minimum consideration.
[0022] The compensation of the second and third aspects of the
invention may, in particular, be for a loss incurred as a result
of the diminution in the value of the insured article due to the
article having been damaged in an accident, notwithstanding that
the article was competently repaired after the accident.
[0023] The minimum consideration of the second and third aspects
of the invention may be an average price for articles of the same
kind as the insured article, as determined by an independent third
party.
EXAMPLE
[0024] The invention will now be described, with reference to the
following non-limiting illustrative example of an insurance product
in accordance with the invention.
Tradeshield Price Protection Policy
Policy Preamble
[0025] This policy is the agreement for Trade-In Value Guaranteed
insurance between Regent Insurance Company Limited (hereinafter
referred to as "the Insurer") and the Insured named in
the proposal form/schedule that forms part of this policy.
[0026] Payment of benefits is conditional upon the payment and
receipt of premium and acceptance of the proposal form by the Insurer
for the period of insurance and in accordance with the definitions,
procedures, exceptions, terms and conditions stipulated herein.
Insuring Clause
[0027] The Insurer agrees to indemnify the Insured for the loss
of value of a vehicle at the point of actual trade-in or re-sale
of the insured vehicle due to the vehicle having been repaired as
a result of accident damage, subject to the terms, exceptions and
conditions set out below and subject to the maximum limit of R50
000.
Basis of Settlement
[0028] The basis of settlement will be the difference between the
highest available quotation in the market and the Trade-in Value
as evidenced in the "publication" at the time of the actual
trade-in or re-sale of the insured vehicle subject to additional
considerations referred to under Administration and Claims below.
If there is no trade-in value in the "publication" the
Insurer will pay the amount by which the trade-in or resale price
is reduced by reason of the accident, not exceeding 2% of the retail
price of the vehicle.
Premium
[0029] The premium payable to qualify for the benefits of the policy
will be a precentage of the purchase price paid by the Insured for
the vehicle stated in teh schedule, subject to a minimum premium,
as determined from time to time by the Insurer. Premium is due within
15 days of the purchase date of the vehicle stated in the schedule
and must be paid no later than 15 days thereafter for cover to commence
from date of purchase.
Duration of the Policy
[0030] "Tradeshield" Price Protection Policy will be
in force for the duration of any finance or lease agreement applicable
to the vehicle, subject to a maximum period of 60 months if the
vehicle is not the subject of a finance agreement. Cover shall cease
automatically with the termination of the finance or lease agreement
or after 60 months if not financed.
Publication
[0031] "The Publication" is the "Auto Dealers' Guide"
published monthly by Mead & McGrouther for passenger vehicles
and the "Commercial Vehicle Dealers' Guide" for Light
Commercial Vehicles. Another similar publication used by all involved
in the Motor Industry to determine trade-in or retail prices may
be used by the Insurer if the said publication is no longer available
for use.
Insured Vehicle
[0032] All new passenger cars and new light commercial vehicles
with a gross vehicle mass not exceeding 3 500 kilograms (kg) as
stated in the vehicle's registration certificate, including double
cabs, that are listed in the "Auto Dealer's Guide" or
"Commercial Vehicle Dealer's Guide". A new vehicle is
one that has not been previously used or registered.
General Conditions
[0033] Unless the following conditions are met, you will not be
covered under this policy and will forfeit your right to claim:
[0034] 1. Cover is limited to vehicles driven within the Republic
of South Africa, Namibia, Swaziland, Lesotho and Botswana. [0035]
2. All cover granted under this policy shall be subject to the jurisdiction
of the courts of the Republic of South Africa. [0036] 3. All reasonable
steps must be taken by the Insured to guard the vehicle against
damage. [0037] 4. The onus will be on the Insured to prove that
any loss of value occurred due to accident damage. [0038] 5. Nothing
contained herein shall give any rights against the Insurer to any
person other than the Insured. Further, the Insurer shall not be
bound by any passing of the Insured's interest in the vehicle other
than by death. [0039] 6. Misrepresentation, non-disclosure or omission
of any material fact by you or anyone acting on your behalf shall
render the cover void. [0040] 7. If the insured vehicle is outside
the Republic of South Africa, it must be repatriated at the expense
of the Insured prior to consideration of the claim. [0041] 8. Should
there be any other insurance covering such a loss, then the Insurer
shall not be liable to pay or contribute more than their rateable
proportion of such a loss. [0042] 9. If any claim be in any aspect
fraudulent, or otherwise improper or improperly processed or submitted,
or if any fraudulent or improper means or devices are used by the
Insured or anyone acting on his/her behalf to obtain benefit under
this policy, all benefits under this policy shall be forfeited.
[0043] 10. The policy cannot be transferred to any other person
or vehicle, nor is the premium refundable in any circumstances.
[0044] 11. The policy only covers an insured vehicle that is a new
vehicle at the time it is purchased. [0045] 12. The vehicle is to
be serviced and properly maintained according to the manufacturer's
specifications and in accordance with the requirements of this policy
as set out in the Service and Maintenance Procedures. [0046] 13.
Records of all accidents must be kept in accordance with the requirements
of this policy as set out in the Accident Procedures. [0047] 14.
In the event of accident damage to the vehicle, the Insured must
comply with the Accident Procedures as set out below. [0048] 15.
In the event of a claim, the Insured must comply with the claims
procedures as set out in the Claims and Settlement Procedures. [0049]
16. The policy will be cancelled without any refund of the premium
if the insured vehicle is not available for inspection by the Insurer
or the Insurer's appointed representative or evaluator in the event
of a claim. If there is any dispute, the vehicle must be evaluated
by an independent evaluator.
Service and Maintenance Procedures
[0049] [0050] 1. The vehicle is to be serviced and maintained as
per the manufacturer's recommended service intervals and according
to the manufacturer's specifications. [0051] 2. Service and maintenance
of the vehicle must only be carried out by a manufacturer's approved
service agent and or selling dealer. [0052] 3. If such a dealer
is not available then the vehicle must be serviced and maintained
by a reputable dealer approved by the manufacturer. [0053] 4. Proof
of service and maintenance must be kept in the original service
manual of the vehicle. The manual must be kept up-to-date. [0054]
5. In case of a lost service manual, written proof must be obtained
from the service agents. [0055] 6. The vehicle must be kept in a
road worthy condition at all times. [0056] 7. The tyres must be
replaced when they cease to be road worthy, or as per manufacturer's
specifications, or every 65 000 kilometres, whichever occurs first,
and proof of purchase must be kept. If there is failure to comply
with the Service and Maintenance Procedures you will forfeit any
right to claim under this policy.
Accident Procedures
[0056] [0057] 1. Records of all accidents and cost of repairs must
be kept. [0058] 2. Photographs of all accident damage must be taken
prior to the commencement of repairs and on completion of all repairs.
[0059] 3. All repairs must be carried out by manufacturer's approved
panel beaters or repair agents. [0060] 4. If such a panel beater
or repair agent is not available, then the repairs must be carried
out by a competent panel beater approved by the manufacturer or
selling dealer. [0061] 5. The space provided for accident records
in the policy document must be stamped and kept up-to-date at all
times. [0062] 6. All the abovementioned documentation must be provided
to the Insurer at the time of a claim. If there is a failure to
comply with the Accident Procedures you will forfeit any right to
claim under this policy.
Claims and Settlement Procedures
[0062] Claims Notification
The Insured must, in the event of a prospective sale or trade-in,
contact the Insurer as soon as possible if a claim might arise from
the transaction.
In the event of loss or damage:
[0063] 1. The Insured must obtain quotations for the value at which
the vehicle will be sold or traded in from three different Franchise
Dealers. These documents must be forwarded to the Insurer, together
with other relevant documentation required prior to settlement being
agreed. [0064] 2. The Insured must also forward to the Insurer,
all documentation reasonably required by the Insurer including the
documents referred to under Service and Maintenance Procedures,
Accident Procedures, Claims and Settlement Procedures and Administration
and Claims regarding the accident damage that caused the loss of
value. Administration and Claims The Insurer will handle all policy
administration and claims [0065] 1. The abovementioned quotations
must be verified by the Insurer prior to the settlement of any claim.
[0066] 2. In the event of a dispute, an independent evaluator will
be appointed by the Insurer to evaluate the insured vehicle to determine
the loss of value due to accident damage. [0067] 3. The Kilometres
and Conditions Chart as set out in the Mead & McGrouther "Auto
Dealers' Guide" and "Commercial Vehicle Dealers' Guide"
will be applied in respect of valuations. The Chart will be used
to determine the correct Trade-In Value according to kilometres
travelled and general condition of the vehicle. If there is failure
to comply with the Claims and Settlement Procedures you will forfeit
any right to claim under this policy.
General Exceptions
[0067] The Insurer will not be liable in respect of:
[0068] 1. Any vehicle used for the following purposes: [0069] Racing,
speed testing, or any use of a competitive nature. [0070] Outside
the manufacturer's design intention. [0071] Hiring or self-drive
hire. [0072] Driving instruction for reward. [0073] On the airside
of airports or airfields. [0074] Security companies or armed response
vehicles. [0075] Courier service or express delivery vehicles. [0076]
Armed forces or police vehicles. [0077] Towing companies. [0078]
Vehicles not registered in the Republic of South Africa. [0079]
2. Accidental damage caused by manufacturer's design or production
defects. [0080] 3. Vehicles where accident repairs or services have
been effected by any unauthorised person or persons, in which event
the policy shall be rendered void. [0081] 4. Vehicles where the
Insured or driver of the vehicle has had his/her driver's licence
endorsed due to drunken or reckless driving. [0082] 5. Vehicles
where vehicles are modified or altered from the manufacturer's specifications
and such modifications or alterations influence the trade-in value
of the vehicle. [0083] 6. Any "kit" cars. [0084] 7. Any
rebuilt vehicles.
[0085] As will appear from a consideration of the above example,
the policy provides that the insurer agrees to indemnify the insured
person for the loss of value of a vehicle at the actual trade-in
or re-sale of the insured vehicle due to the vehicle having been
repaired as a result of accident damage, subject to the terms, exceptions
and conditions contained in the policy, and subject to the maximum
limit of 50 000 South African rands.
[0086] The basis of the settlement is the difference between the
highest available quotation in the market and the trade-in value
as evidenced in the most recent publication of an agreed independent
third party at the time of actual trade-in or re-sale of the insured
vehicle, subject to the additional considerations referred to in
the policy.
[0087] A single premium is due within 15 days of-the date of the
purchase by the insured person of the vehicle.
[0088] The insurance endures for the duration of any finance or
lease agreement applicable to the vehicle, subject to a maximum
period of 60 months if the vehicle is not the subject of a finance
agreement.
[0089] The cover afforded by the policy is limited to vehicles
driven within the Republic of South Africa, Namibia, Swaziland,
Lesotho and Botswana.
[0090] The policy only covers an insured vehicle that is a new
vehicle at the time when it is purchased by the insured person.
[0091] The insured person is obliged to ensure that the vehicle
is serviced and properly maintained in accordance with the manufacturer's
specifications and other stipulations in the policy.
[0092] In order to claim, the insured person must obtain and submit
to the insurer three quotations from different franchise dealers
for the values at which the dealers are prepared to purchase or
exchange the vehicle.
[0093] By means of the invention the insured person may be compensated
for a loss incurred as a result of the actual consideration obtainable
by the insured person for the insured article, when the insured
person disposes of it, being less than the consideration which the
insured person would have received due to the insured article having
been damaged in an accident, notwithstanding that the article was
competently repaired after the accident.
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