How well do know your insurance policy?

By Staff Writer
By Hennie Pretorius, journalist, Justmoney
Case studies highlighted in the July issue of the Ombudsman’s Briefcase, the official newsletter of the Ombudsman for Short-Term Insurance (OSTI), shows that policy holders need to be more familiar with ‘policy wording’ – before submitting a claim.
Justmoney outlines key mitigating factors influencing the final decision made by the OSTI, both in favour of and against complainants.
Always disclose any criminal cases against you:
An accidental damage to a motor vehicle claim was submitted to New National Assurance co. LTD (NNAC). But it was rejected due to pending criminal charges against the insured for being under the influence of alcohol before taking out the policy.
A complaint was submitted by the insured to the OSTI. The Ombudsman ruled in favour of NNAC as the policy was clear on the terms of agreement whereby the insured had to disclose any ‘adverse’ information prior to being insured.
Christelle Fourie, managing director of MUA Insurance Acceptances explained: “It is essential to disclose any criminal charges against you. The insurer has the right to review the application. If for example charges of credit card fraud are laid against the applicant the insurer will not insure the applicant.”
The decision to accept or reject a claim will be determined by whether or not the incident is ‘material’ to the actual loss: “If a car has smooth tyres and while parked is damaged, MUA will accept the claim as the smooth tyres were not the cause [of the accident],” said Fourie.
Look out for exclusions in the policy:
During a power surge leaving a home in total darkness a complainant tripped over a dog and damaged her onyx coffee table. She submitted a claim for ‘accidental breakage’ but the claim was rejected. According to her insurers, Auto & General (A&G), the insurance policy only covers breakage of ‘mirrors and glass’.
The Ombudsman overruled the rejected claim on a technicality. The word ‘include’ was used under home contents, thereby including all household contents. A&G insisted an updated policy had been sent to the insured whereby the word ‘include’ had been omitted, but could not prove it. The insured was paid out.
Make sure you adhere to the policy rules regarding security of your vehicle:
Insurance company Renasa rejected a stolen vehicle claim on the grounds that the insured had not used an accredited Vesa fitment centre to install an immobiliser, even though the immobiliser was Vesa approved.
However, there was no indication in the policy that the fitment centre had to be VESA approved. When reviewing the case the Ombudsman based his decision on the following clause:
“It is a condition of this policy that the above vehicle is fitted with a VESA level 4a, 4b or 4c immobiliser or factory fitted (VSS approved ) immobilizer or an approved tracking device approved by the company’’.
Renasa accepted the decision and settled the claim in full.
Have a home surveyed by a professional before you buy it and insure it:
After purchasing a holiday home the owner noticed certain cracks developing. He submitted a claim to Santam, which was rejected.
Both an engineer appointed by Santam as well as an engineer appointed by the insured came to the same conclusion – the cracks were developing as a result of poor workmanship when the house was built.
Santam’s responsibility was to restore the insured to the same position found in at the time the policy was taken out. The house would have been affected by the poor workmanship long before the policy was taken out and therefore the Ombudsman ruled in favour of Santam.
“Short term insurance is to cover sudden and unforeseen events. Any damage caused over a period of time is irrelevant. Pay a little extra for an engineer’s report before purchasing a house or ask the seller to provide one,” advised Fourie.
The importance of disclosure:
MiWay insurance company rejected a claim for theft of household contents based on lack of information provided by the insured at the time of taking out the insurance policy.
The insured was asked if any open parks or fields were near her house. She claimed there weren’t any but upon ‘validation’ of the claim MiWay discovered an open field and railway line nearby.
Had the insured disclosed this information the policy would have been structured differently. The insured stated that the importance of the information requested was unclear to her but the Ombudsman ruled in favour of MiWay.
Justmoney’s insurance tips:
While taking out home and car insurance is important, so too is the information you disclose to your insurer.
Twist the truth, omit information or lie and it will be to your detriment. It is crucial to ensure the forms are filled out correctly, with full disclosure. If you have questions, ask.
Make sure you understand the policy wording and if you believe you are well within your rights to claim, complain to the insurer first. If they reject you, contact OSTI to help resolve the issue.
For more information on how to lodge a complaint against your insurer visit the Ombudsman at

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