BY Donald Tafadzwa Chidoori
A leading insurance broker Coverlink Holdings has partnered with Tristar Insurance – a subsidiary of First Mutual Holdings – to come up with a comprehensive car insurance product for civil servants.
Coverlink founder and Managing Director Abel Munhande said that the insurance broker was aware that a number of civil servants were not taking up comprehensive motor vehicle cover because of the once-off pay limits and the view that comprehensive cover is very expensive.
“Through our product we have managed to spread the costs of comprehensive cover over a year, making comprehensive motor cover not only affordable to the majority of the population but easily accessible. At the same time demystifying the myth that comprehensive cover is expensive,” Mr Munhande said.
Abel Munhande added that the introduction of the product is inline with the government’s broader financial inclusion strategy.
He also said that the need to ensure that motorists are fully covered, and for civil servants to have a peace of mind knowing that their vehicle is fully covered, guided the development of the insurance product.
This comes as good news not only to Civil servants – most of whom have bought their vehicles through loans – but to many Zimbabwean motorists.
80% of Zimbabwean motorists use third party vehicle insurance which leaves them vulnerable, especially when an incident causes extensive or costly damage to the vehicle, and its declared a total loss or a write–off. “If you merely had third party cover, it means you will lose everything and start to reinvest to buy another car. Which for most motorists is difficult,” said the founder of the Insurance Brokerage company with interests in Botswana.
“With comprehensive vehicle cover you do not only cover third party vehicles, but also cover your own vehicle against accidental damage,” he added.
Comprehensive cover is the most complete form of motor insurance cover. Which over and above the benefits offered by Third Party Insurance covers the owner’s vehicle, for theft of vehicle and/or accessories, damage to the vehicle due to attempted theft and Hotel accommodation amongst other things.
This cover also includes the benefits of Motor Vehicle Roadside assistance, Funeral cash assistance and even Emergency accommodation. The cover sometimes also provides accidental damage to the policy holder’s vehicle not only in Zimbabwe but also in other countries.
So how does the policy work
Premiums for comprehensive cover are calculated using the ‘normal’ actuarial methods however the payment of premiums is spread over 12 months and payments are made automatically via a stop order facility.
Cover is automatic from the time of paying the first installment.
“If your car is involved in an accident lets say in the first month after paying your first premium, and needs repairs, we will pay for everything minus the premium balance,” Mr Munhande said.
“Lets say your car is worth $3000, and you were supposed to pay $210 as comprehensive cover, which would mean you will be paying $17.50 per month. However, if you were involved in an accident within the first month of your monthly installment (or at any time before full payment), and the car is a total loss or write off, we will demand outstanding premium” said the Short Term Insurance Manager at Coverlink – Trevor-Roy Mudangwe.
“Using the above example, lets say you have paid two months’ premium ($35), cover will be immediate but you would have to cover the $175 outstanding premium, before claims processing” Mr Mudangwe added.
Most motorists have lost trust in the insurance industry because of poor claim process turnaround time and honest claims being denied, and the fact that some insurers are failing to pay claims on time.
Coverlink Holding’s MD says the insurance broker is driven by the need to satisfy its customers, as such it pays ‘authentic’ claims on time.
“If your car is involved in an incident, its damaged, and you have given us all the necessary documentation, and all procedure have been taken, our claim processing time is 2 working days if it is a partial loss and 5 -7 days if there is total loss,” said Mr Munhande.
Who can take up the policy?
“While the policy cover is targeted at Civil Servants, Individuals and Corporates who want to take comprehensive car cover under the stop order facility are free to join,” Mr Munhande said.