Having your insurance claim repudiated has to be one of the most infuriating experiences. So it’s no surprise that the Sherwin Jerrier vs. Outsurance Insurance Company Limited case has caused such a stir this week.
Jerrier, a Durban based engineer, sued Outsurance after the insurer repudiated his R608 772.20, claim when it found that Jerrier had not informed Outsurance about two previous accidents, which he had chosen not to lodge claims for. But Jerrier lost his case after the High Court Judge Piet Koen ruled in Outsurance’s favour, saying: “The Plaintiff should have reported these previous incidents within the time frames required in terms of the policy, even if he did not want to claim. He failed to do so. This failure amounted to a material non-disclosure or breach of the terms of the policy, absolving the Defendant from liability.”
The ruling has left many motorists wondering whether from now on every accident, major and minor, which they have not submitted a claim for could influence future claims and result in repudiations.
Considering the ruling, it is understandable why confusion now reigns and motorists are feeling vulnerable. Even the Treasury has waded in to appeal for calm and called for the insurance sector to be fair to car owners. “National Treasury would like to assure the public and motor-car owners that it is engaging with the short-term insurance industry on the implications of the recent Pietermaritzburg High Court judgment (Mr Sherwin Jerrier vs. Outsurance Insurance Company Limited),” it said in a statement.
Outsurance’s stance
Outsurance has since shed clarity on the matter as well as its policy conditions. In a statement, it said that it doesn’t expect a client to report every minor incident suffered after inception of cover. “In fact the premise of an excess (payable in the event of a claim) and the opportunity to be rewarded with an Outbonus (after three claim-free years) serves as incentives for clients to take care of minor damages and losses themselves. Given the substantial saving in administration costs this will produce, we in return are able to offer our clients lower premiums,” said Ernst Gouws, CEO of Outsurance.
However, when we approached Gouws, he did advise that if clients were unsure about anything that they should contact the insurer immediately. He added that if a client has a minor incident where the damage caused is clearly below the chosen excess, they may elect to arrange and pay for repairs without notifying us [Outsurance]. He also advised that if there’s a third party involved in an accident, that clients report the incident so that the Outsurance can deal with any third party claims.
Gouws further outlined Outsurance’s disclosure requirements, saying: “We do not require clients to report incidents where the damage is less than your excess. Clients are always welcome to report such incidents though, and we will gladly assist with estimating the damage.”
So are you in the clear?
Not quite. If you haven’t been completely truthful when you renewed your policy and omitted to tell your insurance company about previous accidents you’ve been involved in (whether you claimed or not) it could come back to haunt you.
Dennis Jooste, the Ombudsman for Short-Term Insurance, advises consumers to be cautious and report incidents they are uncertain about. “They don’t have to report windscreen damage or minor scratches but if there is any doubt I would say to consumers that they should report it. Insurance policies all differ and there are over 100 short term insurers. As a general principle, the insurer requires disclose on anything ‘material’ to the risk.”
Justmoney’s verdict:
It’s best to err on the side of caution. If you have a history of causing accidents you need to disclose this to your insurer. Unfortunately, this can result in you paying higher premiums and some insurers may even reject you as a client. But it’s best to be safe rather than sorry. Commentators concur that if you are uncertain you should report the accident and ask your insurer to assess the damage. This will at least give you peace of mind should you suddently have to submit a claim for that major unforseen accident further down the line.