From car insurance to your teen signing a contract, these are Wendy Knowler’s ‘watch-outs of the week’

Teaching your almost-adult children how to read contracts and check the most important bits – contract term, monthly payments and early cancellation penalty – is an essential life skill.
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In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use.

Can you afford not to insure your car?

If you’re not to blame for the damage caused to your car by another motorist, it is natural to expect the other party – or their insurer – to pay. That’s only fair, right? It’s a natural assumption, but in reality it doesn’t work like that.

If your car is not insured, and a company truck driver ignores a traffic light or stop street and slams into you, in your lane, you will be deemed to be at least 25% to blame “for not keeping a proper lookout”, and the truck driver employer’s insurer will diminish your pay-out accordingly.

You’ll be told something like: “The fact that a driver may have right of way does not absolve one from one’s duty to be vigilant.”

That’s not all – you’ll also be made to pay for 25% of the damage to the truck.

If you protest, the insurer will send you several legal precedents to support their stance.

That’s what happened to “Prem” of KwaZulu-Natal.

In his case, the insurer did some sums and then offered to pay Prem the princely sum of R13,431.29 for his written-off Hyundai i10.

The car had a market value of R72,000, but he ended up with that R13,000-odd when the salvage value (he’s being made to keep the non-driveable wreck) and his portion of the damage to both his car and the truck was subtracted.

Prem’s job as a courier has now come to an end. He can’t lodge a complaint with the ombudsman for short-term insurance because he is not the insurance company’s client.

Bottom line: you can’t afford not to insure your car, especially if you rely on it for income.

Before you rush to Pick n Pay with your cash deposit …

I thought it was worth sharing Pick n Pay’s recent invitation to customers of “all” South African banks to deposit cash into their bank accounts via the retailers’s till points across the land.

So I did, on all my platforms.

I said with the cost set at just R19.95 for a deposit of up to R5,000, it’s a cheaper, safer option than using an ATM or handing your cash over the counter at your bank, which is a ridiculously expensive option.

When Jabulani Zikhali e-mailed me to say that the Capitec ATM in Mbazwana, a small town in northern KwaZulu-Natal, is often out of order, forcing him to pay three times more to deposit his R3,000 cash inside a Capitec branch (R97 versus R36 at the ATM), I shared the PnP till point deposit news with him.

This week Zikhali tried that at the PnP Hyper in Durban North, and was told he couldn’t deposit cash into his Capitec account as their system wouldn’t accept it. He could only withdraw cash from his account at the till.

Concerned that I’d made a mistake, I checked the press release: “This new deposits-at-till points service at Pick n Pay – facilitated through the national payment system – means customers from all South African banks will be able to deposit cash directly into their bank account at any PnP till point.”

It turns out that while the service is available to all banks, the respective bank needs to enable it.

The banks now on board with the deposits at PnP till service are African Bank, Albaraka, Bidvest, Discovery Bank, FNB, Grindrod, Nedbank and Old Mutual.

“We are in the process of on-boarding the other banks, but the timeline is unknown,” a PnP spokesman told me.

Zikhali will receive a voucher for the inconvenience which Pick n Pay’s mistake caused him.

How prepared is your 18-year-old to sign a contract?

The age of majority used to be 21, but the government dropped that to just 18 in 2007, which means many “children” become fully fledged adults while they are still wearing a school uniform.

If parents and school teachers don’t do a good enough job of warning them about the downside of all that legal power, they will end up with bad credit records by the time they’re 21.

That’s because an 18-year-old has the right to enter into any financially, legally binding contract without the consent or knowledge of their parents. As long as they are receiving an allowance from their parents or some form of regular income from, for example, tending tables in a restaurant or tutoring, they will be allowed to enter into a contract. In most cases, the first is a gym contract.

When banking services ombudsman Reana Steyn was with the credit ombud’s office some years ago, she told me she’d spoken to a group of 400 university students about this issue, and they were mostly clueless about the repercussions of defaulting, had no idea what a credit bureau was and how a bad credit record can affect their lives.

I regularly receive e-mails from mothers who are outraged at the discovery that their son  or daughter signed a gym contract without their knowledge, and can no longer afford the monthly fees or no longer want to attend the gym.

In most cases, that is when they discover that despite signing the contract, they weren’t aware of two key things: the contract term, and the fact that if they cancel before those two or three years are up, they have to pay a hefty cancellation penalty.

Teaching your almost-adults how to read contracts, to check the most important bits – contract term, monthly payments and early cancellation penalty – and how to stand their ground with a pushy salesperson is an absolutely essential life skill.

GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler

BY Wendy Knowler

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