Insurers have the full right to investigate any claim that is brought to them, including your social media accounts. Picture: Itumeleng English/African News Agency (ANA)
Insurers have the full right to investigate any claim that is brought to them, including your social media accounts. Picture: Itumeleng English/African News Agency (ANA)

Consumer Watch: With insurance claims, context is now everything

By Georgina Crouth Time of article published Jan 27, 2020

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When it comes to insurance, context is everything.

So, if, for example, you’re driving in the early hours of the morning and crash, your insurer is certain to investigate whether alcohol was involved because an inference would be drawn - in a country with such alarming drunk-driving rates - that their client had been driving while under the influence.

Insurance investigators would refer to breathalyser tests, if conducted, interview family or friends, trawl through bank statements, cellphone records and tracker reports, and probably take a good look at your social media accounts too.

Case by case

Insurance policies entitle insurers to decline liability in cases where the driver was under the influence of alcohol or drugs, or had blood-alcohol levels exceeding the legal limit.

But alcohol consumption, in itself, is not necessarily proof of causality: wine connoisseurs know that even if you don’t swallow, the alcohol in your mouth and breath would be enough to trigger a breathalyser, which is why drivers caught in roadblocks are also taken for blood testing.

The insurer would also have to prove that alcohol consumption had caused the crash: it cannot simply deny claims on the basis that alcohol had been consumed at some point on the day of the incident.

With insurance fraud so rife in South Africa, insurers are within their rights to investigate incidents thoroughly. South African Insurance Association estimates indicate that almost a third of all claims have elements of dishonesty.

Last year, the Association for Savings and Investment South Africa said it had noted a “massive” increase in fraudulent claims and that fraud costs the combined insurance industry billions of rand a year.

Its statistics show that life insurers detected 3708 fraudulent and dishonest claims, valued at R1.06billion in 2018.

The 2018 fraudulent and dishonest claims statistics showed that the total number of irregular claims was lower in 2018 than in 2017, but the claims value remained on a par. In 2017, life insurers detected 5026 fraudulent and dishonest claims worth R1.13bn.of securing lower premiums.

The Global Economic Crime and Fraud Survey (2018) published by PricewaterhouseCoopers indicated that South Africa’s rate of reported economic crime is 77%, compared with the global average of 49%.

Fraud committed by consumers is the second most reported economic crime, with 19% of organisations having to spend up to 10 times as much on investigations as the original amount lost to economic crime. The report indicated that companies are getting better at dealing with and preventing fraud.

But insurers don’t always get it right. It’s how they step in to rectify a bad situation that is everything.

Wrong place, wrong time

If you suffer a loss or “incident” over the festive season, the claims process is likely to be particularly drawn out. And not necessarily for the obvious reasons: it might be purely down to resources.

On December 23, Birch-Acres resident Matladi Magunda crashed her car after she had dropped her sister at work in Johannesburg.

It’s taken a month for her claim to be resolved and Magunda, a cancer patient, feels as if she’s been put through the wringer by her insurance and as if she had committed a crime.

At 8.30 in the morning, no other cars were involved. Magunda had swerved to avoid another car that had veered into her lane, and hit the curb.

Her left front wheel was damaged, so she called her brother, thinking a tyre change would suffice.

But the damage was severe: her brother advised her to call King Price because her vehicle couldn’t be driven in that state.

She says she called King Price and they immediately dispatched a tow truck, advising her to go to the police station to open an accident report.

This is where things went horribly wrong: “The call centre agent started asking me questions that made me feel like I had committed a crime. I was greatly traumatised by the whole experience but I took it that’s how it’s done to eliminate fraudulent claims,” Magunda says.

On January 2, she had to return to work and asked for a courtesy car which she fetched from Imperial and was only allowed to keep for a month.

“Since my return to work I have been calling King Price to check on how far are they with the repairs and they keep telling me a gentleman called Jaco is handling my claim and will call me. Today, it is the 21-01-2020 and he has still not called me and yet they’re busy calling my family members asking them for statements and yet they were not there - my brother only came because I called him for help, now King Price wants him to answer to their nonsense.”

With days to go before she had to return the vehicle, Magunda started to panic: “The reason I decided to write and ask you for assistance is I am undergoing breast cancer treatment and this whole incident with King Price is putting me under a lot of stress and my fear is when I return their courtesy car next week.

“I will be unable to move around for my treatment as I will be starting radiation treatment next month and I am also suffering from ‘chemo brain’, I am so forgetful and I don’t want them to be calling me and asking me questions I can’t answer.”

As outrageous as this all sounds, King Price has put it down to the time of year: insurers are swamped with claims over the festive season and panel beaters close.

A spokesperson said: “All our claims are processed as quickly as possible, as we understand that our clients don’t want to wait through long claims processes.

“This claim took a bit longer than expected due to an influx of claims over the festive season which resulted in some claims taking longer than usual to process. We’re happy to report that we’ve approved this claim and we waived this client’s excess by way of an apology.

“We’re sorry that our client felt it necessary to take her complaint public; that’s not a reflection of the royal service we promise.”

The excess, more than R4000, is a generous offering at the end of a tough month.

Magunda is overjoyed, saying: “I want to take this opportunity to thank you so much. I have just received a call from King Price apologising for the inconvenience caused and they are saying my claim is approved and they have sent authorisation to the workshop to get my car fixed. A lady named Eunica also promised to extend my courtesy car. You are a star.”

* Georgina Crouth is a consumer watchdog with serious bite. Write to her at [email protected], tweet her @georginacrouth and follow her on Facebook.

** Receive IOL's top stories via Whatsapp by sending your name to 0745573535

The Star

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