The most recent Ombudsman’s Briefcase newsletter from the Ombudsman for Short-term Insurance, Deanne Wood, reports on several cases in which she upheld insurers’ rejection of claims, because the policyholders had not complied with the terms and conditions of the policy or had submitted an invalid claim.

The ombudsman’s decisions have the following lessons for you, the policyholder:

You must have your car inspected at the inception of a motor vehicle policy if the insurer requires it. Budget rejected Mrs V’s claim for damage to her vehicle on the grounds that, despite it being a policy requirement, she did not have her vehicle inspected by an approved assessor when the policy was taken out and, contrary to the information given to the insurer, the vehicle was not new.

Budget told the ombudsman that, when investigating the claim, it discovered that the vehicle had been bought from a salvage management company by a third party after it had been written off in an accident. The manufacturer’s warranty on the vehicle had been suspended.

An investigation by the ombudsman revealed that, at sales stage, Mrs V’s husband had been informed of the insurer’s inspection requirement and of the consequences of a failure to comply.

Furthermore, Budget had been falsely informed that the vehicle was new.

The ombudsman upheld the insurer’s rejection of the claim.

You can’t be compensated for something for which you are not insured. Mr G hired a trailer, which was damaged while he was using it. His insurer, Santam, received a claim from the insurer of the trailer. Santam rejected the claim, because the trailer was not insured under Mr G’s policy and, therefore, he was not covered for the loss. An exclusion in the policy stated: “We will not be liable for damage to property … held in trust by, or in the custody or control of, you or your family.”

Santam argued that the trailer did not belong to Mr G; it had been in his custody or control at the time of the incident.

The ombudsman couldn’t fault the insurer’s reasoning and, accordingly, upheld its rejection of the claim.

When you take out a policy, you must tell your insurer of previous insurance claims. MiWay rejected Mr R’s claim for fire damage to his house, because, when the policy was underwritten, Mr R did not inform the insurer of his previous losses.

In his complaint to the ombudsman, Mr R said MiWay should have conducted a background check when he took out the policy. He also said MiWay had failed to provide him with the policy schedule, which would have alerted him to the incorrect claims history.

The insurer told the ombudsman that, when the policy was sold, the consultant had asked Mr R to disclose all claims or incidents that he, or any member of his household, had experienced in the past three years. This was irrespective of whether a claim had been submitted, or whether or not he had been insured at the time. Examples of claims or incidents provided to Mr R included accidental damage, house break-ins and weather-related damage.

Mr R informed the consultant that once, after load-shedding, a fridge and a freezer were damaged. He did not disclose any other claims or incidents.

MiWay said that, after the inception of the policy, the terms and conditions and the policy schedule had been emailed to Mr R. The schedule contained the information furnished by him at the inception of the policy, and it was clear that he had disclosed only one loss.

But when the insurer investigated the claim, it emerged that Mr R had had eight previous claims within the past three years. MiWay argued that, if had it known the extent of Mr R’s claims history, it would not have accepted him as a risk.

It had cancelled Mr R’s policy and refunded all his premiums.

The ombudsman told Mr R that the insurer had alerted him to the fact that the policy was issued in good faith. It was therefore under no obligation to carry out a background check on him, because it relied on the information he had provided.

The ombudsman upheld MiWay’s rejection of the claim and its decision to void the policy.