Hidden Excesses, Strict Forfeiture & Broad Clauses – Is This Device Insurance Designed to Pay Out

I am lodging this public warning after carefully analysing my device insurance policy administered by Viva Cover (Pty) Ltd (trading as Techsured) and underwritten by Guardrisk Insurance Company Limited.

Having reviewed the policy wording against the FAIS Act, Policyholder Protection Rules (PPRs), and Treating Customers Fairly (TCF) principles, I have serious concerns about transparency, proportionality, and fairness of certain provisions.

1. Excess Structure – Potentially Misleading Cost-to-Benefit Ratio

The policy imposes:

25% excess on all claims

Additional 15% excess if claim occurs within 60 days

This results in a 40% deduction from claim value for early claims.

In practical terms, this significantly erodes the indemnity principle. For lower-value devices, the payout after excess may be disproportionately small relative to premiums paid.

The material financial impact of this excess structure is not prominently disclosed in a way that aligns with TCF Outcome 3 (clear information before, during and after point of sale).

2. Absolute 30-Day Forfeiture Clause

The policy states that failure to:

Report within 30 days, OR

Submit documents within 30 days

results in automatic forfeiture of benefits.

This is an extremely strict condition precedent to liability.

Under the Policyholder Protection Rules, terms must not be unreasonable, unjust, or unfair. An automatic and absolute forfeiture without consideration of prejudice to the insurer raises proportionality concerns.

3. Broad Discretionary Powers

The insurer reserves sole discretion to: Determine whether repair, replacement, or cash settlement applies Determine “market value” Determine whether risk is “unacceptable” Decide if precautions were sufficient

The “Unacceptable Risk” clause is particularly concerning, as it allows subjective assessment based on “past claims experience” without objective thresholds.

This creates a material imbalance in rights and obligations between insurer and policyholder.

4. Overly Broad “Reasonable Precautions” & Safeguarding Clauses

The policy requires the device to: Not be left in a public place Be safeguarded at all times Be locked away when not in use

These clauses are so broadly drafted that almost any theft scenario could potentially be challenged.

In practice, this may allow repudiation based on interpretation rather than actual negligence.

5. Mysterious Loss Exclusion – Evidentiary Burden on Insured

The exclusion of “mysterious or unexplained loss” places a heavy burden on the insured to prove detailed circumstances of theft.

In real-world ******* scenarios, victims may not be able to provide precise details. This exclusion can operate harshly against genuine claimants.

6. Average Clause & Underinsurance Risk

The inclusion of an average clause means that if the insured value is less than replacement cost, the insured must carry part of the loss.

Many consumers purchasing low-premium device insurance are unlikely to understand the implications of average.

7. Commission & Binder Fee Structure

The schedule reflects:

20% commission

9% binder fee

Nearly 29% of the premium goes to distribution and administration before risk cost.

Consumers should question how much of their premium actually funds risk versus intermediary compensation.

Regulatory Considerations

Under FAIS and TCF: Material terms must be disclosed clearly and prominently. Products must be appropriate for target market. Claims processes must not create unreasonable post-sale barriers. Terms must not create unfair contractual imbalance.

The cumulative effect of: High excess, Strict forfeiture, Broad discretionary clauses, Extensive exclusions, raises legitimate questions regarding alignment with TCF Outcomes 1, 3, and 6.

Advice to Consumers

Before taking this policy:

Request full policy wording in advance.

Calculate real payout after excess.

Ask how “market value” is determined.

Ask for written confirmation of documentation deadlines.

Understand the impact of early claims.

Low premiums can be attractive, but the true test of insurance is how it performs at claim stage.

Consumers should approach with caution and fully interrogate the fine print.

If unresolved disputes arise, consumers may escalate to:

National Financial Ombud

Office of the FAIS Ombud

Transparency and fairness are not optional in financial services — they are regulatory obligations.