When assessing your claim, an insurer will normally take into account the underlying cause of your loss. This underlying, or “proximate”, cause “may not be the closest cause, in time or space, to the loss, but is the act or event from which the loss resulted as a natural, direct, uninterrupted consequence and without which the loss would not have occurred”, according to the online Free Dictionary.

In a case study in the July issue of the Ombudsman’s Briefcase newsletter from the office of Deanne Wood, the Ombudsman for Short-term Insurance, an insurer repudiated a death claim on the basis of its immediate cause, without duly considering the proximate cause.

Mr E, who had personal accident insurance with Standard Insurance, was involved in a motor vehicle accident in May last year. After three months in intensive care, Mr E, who was 78, was transferred to frail care, where he died in October.

Standard Insurance repudiated the death claim by Mr E’s dependants on the grounds that Mr E had survived the accident and had subsequently died of natural causes – this was the cause of death on his death certificate. Death by natural causes is not an insured peril under personal accident cover.

The ombudsman’s office investigated the claim after Mr E’s dependants submitted a complaint.

Mr E’s medical records showed that he had suffered “multiple rib fractures, severe head injury with multiple brain contusions and a subdural haemorrhage. His clinical condition continued to deteriorate and he developed a number of further complications, such as lung contusions and ventilator-associated pneumonia”, the ombudsman’s newsletter says.

The relevant definitions in the policy were:

• Accident: a sudden and unexpected event at a specific time and place. It must cause external, visible bodily injury to the insured person that could lead to a claim for death or disability.

• Bodily injury: bodily injury or physical suffering within 12 months of the accident that caused it. The injury cannot have any other cause, such as a physical problem, weakness or illness that existed before the accident. Injury excludes any sickness or infection, unless it was directly because of an accidental bodily injury.

The ombudsman found that, although the final diagnosis was heart failure, the evidence indicated that this was because of medical complications that resulted from the accident.

It appeared that Mr E had not suffered from heart disease or hypertension before the accident, and the final diagnosis was not related to any previous medical treatment.

In the view of the ombudsman, the proximate cause of Mr E’s death was the accident in May 2015, and she recommended that the insurer settle the claim.

Standard agreed and settled the claim in full, the ombudsman’s newsletter says.

‘Reasonable person’

Another legal concept that is often tested in insurance cases is “reasonable person” – what would a “reasonable person” have done in the circumstances? The Free Dictionary defines the concept as “a hypothetical person in society who exercises average care, skill and judgment … and who serves as a comparative standard for determining liability”.

The Ombudsman’s Briefcase reports on a case in which a policyholder’s claim was rejected even though it was found that he had taken reasonable steps to adhere to the requirements of the policy.

Mr B reported the theft of his car to King Price, but the insurer rejected the claim on the grounds that Mr B had not reported the theft to the police as soon as it was reasonably possible to do so.

Mr B complained to the ombudsman, arguing that he had complied with a condition in the policy requiring the loss to be reported to the police within 24 hours.

According to the newsletter, King Price told the ombudsman that Mr B had reported the theft to the police about 16 hours after he discovered that his vehicle was missing. If he had reported it immediately, or as soon as it had been reasonably possible to do so, it argued, the chances of recovering the vehicle would have increased.

The insurer also said that Mr B could have called 10111 to report the incident telephonically.

The relevant section of the insurer’s motor vehicle policy states: “If you’ve suffered a theft, hijacking, burglary or any crime-related event, you must tell the police of this, as soon as possible, but no later than 24 hours after becoming aware of the event.”

Mr B’s version of events was as follows, according to the newsletter: he had parked his car in an outdoor parking area at about 9am, and when he returned that afternoon, he found that the vehicle had been stolen. He immediately contacted King Price’s emergency-assist line to inform the insurer about the theft. The operator advised Mr B that he needed to report the incident at the nearest police station.

Mr B did not have transport, so he took a taxi to a mall, where his wife was shopping at the time. Shortly thereafter, they went to the police station in that area to report the incident. Mr B was told that he could not report it there and had to go to the police station in the area where the incident occurred.

Because Mr B had to return home to attend to his children, he reported the theft the next morning at about 8.30.

The ombudsman listened to the recording of Mr B call to the emergency-assist line.

The newsletter noted that the operator did not advise Mr B that he could call 10111 to report the theft.

In his complaint, Mr B stated that he did not know that he could have reported the theft telephonically and, if the operator had informed him of this, he would have done so immediately, the ombudsman’s newsletter says.

After considering the facts, the ombudsman took the view that Mr B had reported the incident as soon as it was reasonably possible for him to do so and that, in any event, the period within which he reported the incident fell within the 24-hour period required by the policy. Mr B had therefore complied with the policy.

The ombudsman asked King Price to settle the claim, which it agreed to do.