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Outsurance to weigh up its options

By Tania Broughton Time of article published Jul 13, 2015

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Durban - Outsurance, which lost a court battle with a former client over its refusal to pay him out for an accident because he had not disclosed two previous accidents for which he had not claimed, said it was still considering whether to appeal against the judgment.

But in the meantime the company would investigate its processes to ensure that clients were “properly informed” of what was expected of them.

Outsurance chief executive Ernst Gouws issued a statement on Friday after studying the judgment which had been handed down earlier in the week and which was reported on in The Mercury.

The legal tussle between the insurance company and engineer Sherwin Jerrier began in 2010 after it repudiated his R600 000 claim for damage to his Audi Quattro.

In the initial trial, Judge Piet Koen ruled that the company had acted correctly because Jerrier, in terms of the policy wording, should have disclosed the two previous accidents even though he had not claimed for them.

WHEN TO SPEAK UP

The policy read: “You need to … inform us immediately of any changes to your circumstances that may influence whether we give you cover, the conditions of cover or the premium we charge … this includes incidents for which you do not want to claim, but which may result in a claim in the future”.

But three appeal judges said the policy did not stipulate any ongoing duty to report incidents which the insured person had decided to sort out themselves.

They said there was uncertainty as to what was expected of an insured person who might not want to lodge a claim in the hope of preserving his bonus.

The company, it said, actively discouraged claiming in order to preserve the bonus.

Gouws acknowledged that the latest ruling “questioned whether the client clearly understood the need for reporting all incidents”.

“It reiterated the importance of keeping our clients properly informed of what we expect of them.

“In order to ensure that we always treat our clients fairly, we are certainly going to investigate our current processes and amend them to ensure we avoid any confusion in future.”

The Mercury

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