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CRA Insurance News – South Africa

As a result of the Covid-19 pandemic, “business as usual” isn’t what it used to be when it comes to the repairs of collision-damaged vehicles.  Sanitization as we work has become a way of life – not only as a legal requirement, but more importantly to protect the health and wellbeing of our clients, staff and suppliers.  Unfortunately, sanitization comes at a financial cost.

In a post published on 1 June 2020, we highlighted the reluctance of short-term insurance companies to contribute to the additional cost of sanitization incurred as part of the process of repairing a collision-damaged vehicle.  This left the collision repairers with a dilemma, as they, their clients and suppliers are exposed to the (potentially) lethal Covid-19 virus during the repair cycle of collision-damaged vehicles.  In addition, in terms of prevailing Covid-19 emergency regulations, new procedures and protocols are required to protect all the parties involved in the repair cycle.

The Collision Repairers Association (CRA) were concerned about the attitudes initially displayed by the short-term insurers, and elected to intervene by requesting all short-term insurance companies to agree on and share additional sanitization costs with repairers.

We are happy to report that most short-term insurers have now agreed to share these additional sanitization costs with the repairers.  We have to acknowledge them for the exceptional spirit of cooperation, good faith and sound social responsibility displayed by them.  Some of the short-term insurers who expressed their willingness to share these costs and confirmed by reply in writing, are (to name but a few) Santam, MiWay, Bryte, ABSA, King Price and Old Mutual Insure.  It wasn’t our intention to leave anybody out, so if you’re an insurer, please add an explanation of your policy in this regard in the comments below!

We have to mention Standard Bank Insurance specifically.  After initially being reluctant to contribute to sanitization costs, they have now indicated to CRA their willingness to consider individual claims for sanitization costs on a case-by-case basis.  We have yet to hear of payments made in this regard, but we trust that Standard Bank Insurance will keep their promise of reasonability in their consideration of claims, and as such act as the socially responsible organization that they claim to be.

Finally, we come to OUTSURANCE, one of the largest short-term insurers in South Africa.  Unfortunately, we have to report that Outsurance apparently remains unwilling to contribute to sanitization costs associated with the repair of collision-damaged vehicles.  This unwillingness is expressed in correspondence received, but also in claims for sanitization costs from our members being rejected by Outsurance. 

It is clear that the short-term insurance industry is one of the few that had substantial savings as a result of the lockdown, albeit but subject to ongoing litigation in courts of law and may need to pay substantial claims against business interruption policies. In fact, many of them offered significant discounts in premiums, due to the dramatic reduction in driving that reduced claims by as much as 70%.  Notwithstanding this, Outsurance seems determined to make the already overburdened and overwhelmed consumer to pay for the cost of sanitization post repairs in support of social responsibility.  In our opinion, this attitude is unfair to consumers and repairers alike, and magnifies Outsurance’s subordination of consumer safety to corporate profit.