In addition to the widespread issue of rejected claims due to alcohol consumption, another significant area of concern for South African consumers is the lack of awareness about the various factors that can lead to rejected claims.

Most consumers are not fully informed about the potential pitfalls in their insurance policies, which can lead to unpleasant surprises when they need to file a claim.

The single biggest cause of complaint by consumers to the Ombudsman for Short-Term Insurance (OSTI) last year was insurers rejecting motor vehicle accident claims due to drunk driving.

This issue was highlighted in the Ombudsman’s annual report, which revealed that of the 9962 complaints received by the office, 49.3% were related to motor vehicle claims.

Within this category, an overwhelming 74% of the claims were for accidental damage to vehicles, with the majority of rejected claims because the driver was under the influence of alcohol.

The report emphasizes that driving under the influence remains a persistent problem for the South African insurance industry. Advocate Deanne Wood, the Ombudsman, pointed out that many South Africans are unaware that their claims can be turned down if there is sufficient evidence that alcohol contributed to the accident.

Standard policy wording often includes clauses that state claims can be repudiated if the driver is found to be “under the influence or exceeding the legal limit,” which means that alcohol impaired the driver’s ability to operate the vehicle safely. As a result, consumers could lose out on their claims at a time when they most need financial support.

One of the key misunderstandings among consumers is the belief that insurers require a breathalyzer test or blood result to prove that they were driving under the influence. However, a variety of factors can be legally used to infer that a driver was intoxicated.

These factors include the driver’s behavior at the time of the accident, the smell of alcohol, the circumstances surrounding the accident, the driver’s location before the incident, and witness reports indicating that the driver had been drinking before the accident. These elements can be used as evidence to reject a claim, even in the absence of a formal test.

“For some reason, consumers don’t seem to hear our warnings against drinking and driving,” Wood said.

“It can have disastrous financial consequences for a consumer. Not only can your claim for damages to your own motor vehicle be rejected, but your insurer will most likely reject any third-party claims. This means you could also be liable for the costs of repairs to other vehicles involved in the accident as well.”

The implications of a rejected claim due to alcohol consumption can be severe, extending beyond the immediate financial loss.

Consumers may find themselves personally liable for significant costs, including repairs to third-party vehicles, medical expenses, and even legal fees if the case goes to court. This financial burden can be devastating, particularly if the consumer is already dealing with the aftermath of an accident.

In addition to alcohol-related rejections, the second highest cause of complaints in the motor vehicle claims category was due to consumers misrepresenting information when taking out their policies.

This includes providing incorrect information about the regular driver of the vehicle, previous insurance and claims history, credit history, security devices, and whether the vehicle would be used for personal or business purposes.

Misrepresentation can lead to a claim being rejected on the grounds that the policy was obtained under false pretenses, leaving the consumer without coverage when they need it most.

The annual report also highlighted other areas of concern. Homeowners’ claims made up 20.4% of all complaints, with issues such as maintenance-related damage and non-disclosure of material facts leading to rejected claims.

Commercial claims accounted for 7.9% of complaints, while household content claims made up 6.2% of the total. These figures underscore the importance of consumers understanding their insurance policies and the factors that can lead to claim rejections.

The findings in the Ombudsman’s report serve as a stark reminder for consumers to be diligent when purchasing insurance and to fully understand the terms and conditions of their policies.

Regularly reviewing one’s policy and ensuring that all information provided is accurate can help prevent the frustration and financial hardship that comes with a rejected claim.

Consumers are encouraged to ask questions, seek clarification, and be proactive in managing their insurance coverage to avoid being caught off guard in the event of a claim.

Learn more about how Repudiation SA can assist you in handling your rejected claims: Services

Source: Sowetan Live – Link