Wendy Knowler relates the nightmare tale of a client who took out car cover with Constantia Insurance, unaware that the Prudential Authority was looking into the company’s finances.
Africa Melane talks to consumer ninja Wendy Knowler on The Money Show.
Click on the image below to listen to the full interview.
– The Constantia Insurance Company was placed into provisional curatorship in August 2022 after the Prudential Authority had already been engaging with the insurer for some time because it was not holding sufficient funds to protect policyholders.
– Wendy Knowler relates the nightmare experience of one client who has been left with debt of R380K on a written-off car.
When Constantia Insurance was placed into provisional curatorship in August last year a lot of clients with claims in the processing stage lost out.
The company is now in the process of final liquidation.
On The Money Show this week consumer journalist Wendy Knowler focuses on a particular client whose loss is “massive”, due to some unfortunate timing.
“The injustice of it is sitting very heavily with me, so I can only imagine what it must be like for the victim in all of this.”
Natalie Sass bought a Hyundai Kona in March 2022, financed by Absa and insured for R519 000 with Constantia via her broker. Neither were aware – as the Prudential Authority was – of Constantia’s very precarious financial position, Knowler reports.
After an accident in August, Sass’s vehicle was declared a write-off by insurance assessors.
Her claim was approved, and she was given the free use of a hired car for 30 days.
But on August 30 – less than three weeks later – she got an email advising her of Constantia’s liquidation application, and this bombshell news: ‘The curator will not pay any existing claim.’
Wendy Knowler, Consumer journalist
Sass opted to pay the rental company R6400 to keep the hired car for the full month.
At the time, she was just six months into her five-year Absa contract to pay off the car, at R8 000 a month, with a hefty balloon payment to pay after that.
Sass was presented with three options out of this mess, one of which was to relinquish the car to Absa.
“The bank sells it as wreckage and she settles the difference between what it fetches as wreckage and her outstanding balance of R482K.”
Sass says that so far the best price Absa has got for her wreckage is R100K, leaving her with a shortfall of R380K to pay off and nothing to show for it.
It’s about the same amount I am paying off as a home loan. So when I apply for a car I will probably be declined because of that R380K – it reduces my available income.
Natalie Sass, Constantia Insurance client
She is hoping that she gets a significant lump sum when the Constantia liquidation process is complete but I have warned her that this is unlikely.
Wendy Knowler, Consumer journalist
Sass’s nightmare experience begs the question whether we should actually approach the Prudential Authority before signing up and ask which insurers they’re engaging with about insufficient funds, Knowler concludes.
She thought this was a viable insurance company… It could happen to any of us…
Wendy Knowler, Consumer journalist
To hear the full details scroll to the top of the article for the audio
Source: CapeTalk