“But I Don’t Want It Repaired…I Want A Brand-New One!”

So do I…So do I!

Let me tell you a quick insurance story about Brad.
Brad’s daughter got hold of his laptop bright and early one morning after he left it on the kitchen table overnight. After banging around on the keyboard for some time, she got bored and turned her attention elsewhere.
In the process of turning, she managed to knock a glass of water over – bye bye laptop!

Anyways, Brad decided to make a claim against his car and home insurance policy since the laptop was insured under the all risks section. His insurance company duly popped around a day or two later to pick up the damaged laptop.
A week later Brad gets a call from the insurance company asking where and when they can drop the laptop off.

“What do you mean you want to come and drop the laptop off? My claim was approved by you guys, so why can’t you pay me the cash and I will go buy myself a brand-new laptop?”

“No Mr…, we managed to repair your laptop. It was just a case of letting the water dry out and replacing one or two small parts.”

Boy, calling Brad upset was an understatement!

But could Brad demand that his claim be settled in cash?

This is where it’s important to read the fine print in your car and home insurance policy wording. Let’s take the Santam policy wording as an example…
Under their general terms and conditions, it talks about claims. One of the points mentioned is their ‘claim settlement basis’.
Now if you read further you’ll notice that they say they’ll compensate you by “anyone or more of the following methods”:

  1. Repairing.
  2. Replacing.
  3. Paying cash, or
  4. any combination of these.

Further on it states that if they replace or repair, they aren’t obliged to do so exactly, but only as circumstances reasonably allow. Santam may also use any repairer of their choice.

Are insurance companies being unreasonable?

Remember that car and home insurance is there to place you in the same position as you were prior to the loss. Now your laptop or television set might be an older model, and in this situation, it might not always be possible to find the exact model again. In this scenario, the insurance company would replace with a similar, but newer model.

In fact the situation called ’betterment’ might arise where they place you in a better position than before. In this instance, they might even charge you for the improvement in your situation… But that’s a story for another day!

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Until next time.

The InsuranceFundi Team

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