Despite being labelled as VESA approved, the South African Insurance Association (SAIA) reserves the right to determine whether or not factory-fitted alarm systems and immobilisers comply with security devices required for insurance purposes.
Recently, the short-term insurance ombudsman and the SAIA ruled that Mutual & Federal was well within its rights to repudiate a claim as a result of insufficient security, in spite of the fact that Santam's policy considered the device to be VESA approved.
The FAIS ombudsman urged Minister of Finance Gravin Gordhan, the Financial Services Board, motor manufacturers and the SAIA to discuss whether or not factory-fitted security devices comply with insurance requirements and the differences of opinion regarding the devices. Currently, no standard requirements exist across insurers, which means that if insureds change insurers, their current security may not be approved under their new policy.
“VESA standards have been created to ensure that after marker security devices meet certain standards in order to eliminate the use of inferior security systems,” says Deputy Executive Officer of SAIS, Refilwe Moletsane. “Because of the risk exposure this is only one of the elements considered in the mitigation of the risk [by insurers]. It has never been the intention of VESA to standardise security requirements as insurers may, at their own prerogative, determine these requirements depending on their risk analysis.”
While VESA has never tested factory-fitted devices, but rather plays a major role in after marker devices, another measure exists to measure security at manufacturer level. Vehicle security system (VSS) standards attempt to match insurance industry security requirements with car manufacturers' installed systems.
VSS vs VESA
The VSS approval of devices, according to Moletsane, was “a platform created between the SAIA and NAAMSA in order to understand the grading of the factory fitted security device, without having to refer every vehicle to the manufacturer”, and not as a standardised measure for insurance purposes.
“Although your device is VESA approved,” says Guy Eagle of www.Carandhomeinsurance.co.za, “this doesn't mean it meets your insurer's security requirements as it could fail the VSS assessment.”
It is not within the SAIA's mandate to enforce that factory-fitted devices meet VSS standards, but the assessment does afford manufacturers the opportunity to improve their factory fitted system in light of the outcome of the assessment. “Manufacturer can improve their devices and the level of security on their vehicles before the assessment based on the requirements of the assessment.”
Insurers use the same level of assessment when determining whether or not a security device is adequate for insurance purpose. By using the list of VSS evaluated and approved vehicles insurers can determine if certain vehicles require additional security. “Vehicles not on the list cannot be declared to be VSS approved as they have not been evaluated as such. We need to reiterate that this approval process involves the manufactures and the SAIA,” says Moletsane.
SAIA evaluates the level of security systems of all vehicles manufactured in South Africa, to give insurers enough information to decide whether or not to insure a vehicle. This assessment is done based on the price of the vehicle, popularity of the vehicle and theft statistics.
“SAIA manages this process through the assistance of a Vehicle Technical Expert. The process is initially undertaken by the respective manufacturer chief engineer and then by the SAIA.”
While it is the responsibility of insurers to inform policy owners that their vehicle security meets the requirements or not at the underwriting stage, consumers also have access to the VSS list of approved vehicles through their insurers or intermediaries.
“If you're changing insurers,” warns Eagle, “make sure that your new insurer recognises your vehicle as being VSS approved.”
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