Whether you are planning a cross-country road trip to visit loved ones over the festive season, or whether you are jetting around town locally, it is important to ensure that the minute you drive off your property you have the peace of mind that no matter what happens, your insurance will cover you.
According to Christelle Colman, managing director of Elite Risk Acceptances, one of the most important things you can do as a policyholder is to make sure you familiarise yourself with and understand the terms and conditions of your insurance policy – what you’re covered for and in which instances you are not covered by your policy.
“Living in a modern, always-on world, our day-to-day lives are busy, we forget things or put off doing personal admin until a ‘more convenient time’ without considering the potential impact of these decisions. You never know when you’re going to be involved in an accident, so to avoid having your insurance claim rejected, it’s important to make sure that your policy information is up to date and that your car is in good working condition and compliant with the rules of the road,” advises Colman.
The 2018 Ombudsman for Short-Term Insurance (OSTI) Annual Report revealed that the majority of considered complaints for motor vehicle claim disputes (74%) were for accidental damage. The primary cause for complaints was the amount offered for the settlement of claims and the secondary cause for complaints was rejections based on the insured’s alleged non-disclosure or misrepresentation of underwriting details at sales stage.
In the pursuit of avoiding futile claims altogether, Colman draws on her many years in the industry to unpack the 10 most common reasons for car insurance claims being rejected by South African insurers.
Driving recklessly or under the influence
Driving under the influence of alcohol or drugs is a criminal offence, as such motorists that are caught driving under the influence risk having their cover immediately nullified. However, an insurance claim can also be rejected if a driver is believed to have acted in a reckless manner and this behavior is believed to be the cause of damage or destruction to a vehicle.
Premiums aren’t up to date
The simple rule of thumb here is when no premium is paid for a specific month, there will be no cover. So regular and timeous payment of premiums is very important to ensure you aren’t left without cover when you need it most. When times are tough economically, the worst thing you can do is to cut your insurance payments as you will be left to foot the bill for any accidental damage to your or third party vehicles.
Unlicensed or unspecified drivers
When a motor insurance policy stipulates that cover is only provided for a specific named driver, an insurance claim will only be successful if this driver was behind the wheel at the time of the incident. Should an accident occur while another person is driving the car, the claim may be rejected as the policy only covers the named driver. The claim will also be rejected if the driver of the vehicle was not in possession of a valid driver’s license at the time of the incident.
The condition of your vehicle, such as broken windscreen wipers, missing mirrors or a tyre tread below the legal limit of 1.6mm, can significantly increase the likelihood of an accident occurring. In the event that you are involved in an accident and further investigation reveals any of these pre-existing conditions, the insurance claim may be rejected on the basis of the vehicle not being in a roadworthy condition.
Personal or business use
When obtaining cover for your vehicle you will be asked whether the car is used for personal or business use. That’s because if your car is used for business purposes, it is assumed that you are on the road more frequently than the average person, thereby increasing your risk of being involved in a motor accident. This increased risk affects your premium.
Vehicle not parked securely
Requirements for securing a motor vehicle in a garage will differ between insurers; some will accept an off-street parking as acceptable while others may stipulate that the vehicle must be kept behind an automatic garage door. Insurance premiums are calculated according to what level of security the vehicle is kept in. It is therefore vital to ensure that you are adhering to whatever method of security you have agreed to in the insurance policy.
Vehicle inspection was not carried out
It is common practice for insurers to insist that a vehicle inspection be done to ascertain any pre-existing damage when taking out a new policy. If this inspection is not carried out properly, you are in breach of contract and your claim may be rejected.
Leaving keys in plain sight
This is viewed as the owner failing to exercise due care and you therefore risk having a claim rejected in the event that the motor vehicle is stolen. Some insurers even stipulate in the motor policy exclusions that theft cover of the vehicle is excluded if the ignition keys are left in, or on the vehicle.
Misrepresentation of underwriting details
This would include misrepresentations made about the driver’s details, personal or business use as well as insurance claims (drunk driving offences) and credit history, among others.
Insurable interest refers to the interest that a person has in an insured item. A person has an "insurable interest" in something when loss or damage to it would cause that person to suffer a financial loss or certain other kinds of losses. With car insurance, it is important that insurable interest exists at the time of taking out the policy as well as at the time of the loss. In simple terms, it means you can’t insure items that don’t belong to you, even if you pay the insurance premium on the item i.e. a parent insuring a car that is registered in the name of a child and paid for by the child. With this example the child must take out the insurance him or herself as the parent does not have an insurable interest in the item.
With the silly season fast approaching, Colman concludes by advising motorists to make use of the value-add services provided by their insurer. “Most reputable insurers offer a number of value-added services, this typically includes a limited number of ‘Drive me home’ rides per year, usually around six rides per year and generally need to be prearranged before a night out. These services are there to help policyholders avoid drinking and driving while having a good time, and to reduce the number or drunk driving related accidents on our roads.”