WeeklySA_AdminINTEGRITY: Principle of fairness imperative to ensure fair and equitable solutions between Insurers and their clients…
By Thuli Zungu
COVID-19 pandemic and lock-down regulations are now a scapegoat for service providers who do not want to honour the consumers claims. Without the intervention of the Short-Term Insurance Ombuds (OSTI)Themba Ndlovu* and Nthabiseng Mofokeng* would have been left on the lurch.
Edite Teixeira-Mckinon, of the OSTI shared two examples in which insurance companies were hiding behind the lock-lockdown regulations instead of setting claims. Teixeira said OSTI applies customer fairness principles to ensure fair and equitable solutions between Insurer’s and their clients She said Ndlovu’s vehicle was involved in an accident during level 4 lockdown when people had to remain home and allowed to travel under certain circumstances. At this stage, Ndlovu was in the process of relocating from one residence to another and travelling between these residences when he had an accident, she said.
Ndlovu later lodged a motor vehicle claim to the insurer which was later rejected on the grounds that he contravened the lockdown regulations issued in terms of the Disaster Management Act, she said.
She said the insurer could not provide the relevant policy provision that was relied on to justify the rejection of Ndlovu’s claim. The insurer relied on the provision which states that if Ndlovu or the person driving his car does not have a valid driver’s licence, or if he broke the law, then the claim will be repudiated, she said. Teixeira-Mckinon said the insurer argued that Ndlovu was not performing an essential service and the relaxation on the restriction did not apply to his movement between his households.
The insurer contended that Ndlovu had a work permit to travel between his residence and place of work only and was therefore in contravention of the regulations, she said. It further, said that if Ndlovu had adhered to the regulations, he would not have had an accident as he would not have been travelling on that route and as a result increased the insurer’s risk, she said.
Teixeira-Mckinon said the OSTI the insurer did not prove that the accident was caused by the insured breaking the law. From an equity perspective OSTI found that there was no causal link between the breach of law and the accident and recommended that the insurer settle Ndlovu’s claim.
Nthabiseng Mofokeng’s* claim was rejected on the grounds that she did not update her residential address when she relocated to Brakpan, Gauteng during the lock-down, Teixeira-Mckinon said.
Mofokeng had temporarily visited her family and had no choice but to remain there due to the COVID-19 lockdown when her car was stolen. Dissatisfied with the rejection of the claim, and after she approached the insurer’s internal dispute officer the initial decision was overturned, said Teixeira-Mckinon.
Mofokeng was told that her claim would be settled on a proportional basis by deducting the percentage of the premium that would have been paid to the insurer if the client had updated the address on the policy, she said. The deduction amounted to 29.12% from her claim because she was in Brakpan and not Bloemfontein for two months.
The insurer would therefore only pay 70.88% of the claim, stating that it only received 70.88% of the correct premium, she clarified. Mofokeng was still not happy with this decision as she was compelled to remain in Brakpan due to the pandemic lockdown, said Teixeira-Mckinon.
OSTI considered this fact when making its decision and requested the insurer to settle the claim by deducting the actual difference in the premium for the month that the vehicle was at the new risk address. Mofokeng is also sorted.
