The complainant submitted a claim for accident damage to her vehicle. The claim was rejected on the basis of a misrepresentation with regard to the regular driver.
The insurer alleged that the incident driver, being the insured’s partner, was the regular driver of the vehicle and had they been notified of the change in regular driver, the premium would have increased by approximately 52%, hence the claim was rejected.
The complainant advised that the vehicle was being stored at the premises of the insurer’s service provider, and that she was being held liable for the storage costs. The insurer was advised that unless the insurer can show that the complainant had been notified upon the rejection of the claim to uplift the vehicle, the insurer must ensure that the vehicle is returned to the complainant and that the storage costs are paid for by the insurer. The insurer was also advised that, upon rejection of the claim, the insurer must tender the return of the vehicle to the complainant. The insurer investigated the matter and the vehicle was returned to the complainant with the insurer settling the storage costs.
With regard to the rejection of the claim on the basis of the change in regular driver, the insurer wished to rely on the evidence of the complainant’s friends who confirmed that the incident driver was the regular driver of the vehicle. The complainant produced affidavits from these friends who denied having informed the insurer that the incident driver was the regular driver of the vehicle.
The insurer initially offered to settle the claim on a pro-rata offer, which offer was rejected by the complainant. It was pointed out to the insurer by the Ombudsman that in light of the contradictory evidence of the complainant’s friends, the insurer had no other evidence to rely on to substantiate the rejection of the claim and therefore the claim had to be paid in full. The insurer then settled the claim in full.
Change in excess structure
The complainant submitted a claim for fire damage to his premises. The complainant was unhappy about the excess amount and a contribution he had to make in terms of the Public Authorities Requirements clause in the policy, towards the reinstatement of the building in accordance with the building regulations.
According to the insurer, during 2007 a renewal notice was sent to the complainant notifying the complainant that in the absence of a fire compliance certificate, the excess payable in the event of a claim would be 5% of the claim, minimum R5 000.00. As at the time of the loss, being April 2008, this certificate had not been received by the insurer.
The complainant argued that, due to the onerous nature of the new excess endorsement, more should have been done by the insurer to draw this to his attention. It was also pointed out to the insurer that the renewal notice was in breach of the Policyholder Protection Rules and that the insurer had not discharged its burden as set out in the matter of Compusource v Constantia Insurance Company, (143/2004) [2005] ZASCA 29(30 March 2005) where the court held that the insurer who puts unusual and onerous terms in a policy has a duty to alert the insured to those terms. Merely highlighting the more usual and attractive aspects of the policy is not enough, the insurer should also endeavour to highlight the most onerous and unusual terms. The consequence of not having brought the particular clause to the complainant’s attention was that the complainant could not be held bound by the provisions of the relevant clause.
The insurer agreed to apply the excess structure that was in place as at the inception of the policy and the balance was refunded to the complainant.
With regard to the Public Authorities Requirements, the insurer’s application thereof could not be faulted as it was a term that was contained in the policy wording since the inception of the policy.
Non-payment of premiums and PPR
The complainant submitted a claim for accident damage to her vehicle which took place on 07.12.2008. The insurer advised that the claim was rejected as there was no cover in place due to the non-payment of the premium.
The insurer advised that the policy incepted on 12.11.2008 and the first premium was payable on 01.12.2008, which premium was not received due to insufficient funds. The policy wording provided for a 30 day grace period, which meant that the insurer would double-debit the complainant’s account 30 days after the first failed debit. In this instance, the insurer did not double debit 30 days later, as the insurer argued that this was the first premium and therefore the complainant was not entitled to a grace period within which to pay the premium.
It was pointed out to the insurer that as the first premium was payable in the second month of the duration of the policy, Policyholder Protection Rules provided that the insurer was obliged to re-debit the complainant’s account during the grace period. The complainant furnished our office with a copy of her bank statement for the month of January 2009 and it was found that had the insurer double debited on 02.01.2209 as per the requirements of PPR, the premium would have been paid.
The insurer was therefore advised that the claim must be paid, less any premium due, which the insurer duly did.
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