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Why Could Your Insurance Claim Be Rejected?

Insurance companies and clients don’t always see eye to eye. We took a look at the most common causes of dispute and how to avoid them.

Every year, the Ombudsman for Short-Term Insurance releases it's annual report on how satisfied clients are with the manner in which insurers handle their claims, as well as tracking disputes between the two. Car claims generally represent a massive chunk of the complaints which the Ombud handles each and every year, and some 75% of these claims are due to accidents. 

In many cases, these claims are rejected by the insurer due to the insured driver being under the influence of alcohol at the time of the accident, and though clearly at fault, the insured may take issue with that decision.

So, insurance companies and their clients don’t always see eye to eye. 

Let's take a look at the top disputes between the insurer and the insured, according to recent Ombudsman reports. 

Avoid The Pitfalls! Be Aware Of These Common Insurance Exclusions!

Bending The Truth When Applying For Insurance

One of the leading causes for rejected vehicle claims is misrepresentation. With regards to car insurance, for instance, this may allude to who the regular driver of the car will be. If you’re putting yourself down as the regular driver of the vehicle, when somebody else will be using it instead, such as your teenage son, then this will become a problem later on. Your claim will also be rejected if:

  • You have lied about your claims history;
  • You’ve lied about your credit history;
  • You have lied about your security system / devices and;
  • Whether the insured vehicle will be used for personal or business use.

Maintaining Your Property

Some of you may remember the tumultuous year that was 2017, during which we saw a large amount of storm and fire damage occur across the country. We had tornadoes in the Vaal area, the devastating fires in Knysna, extreme drought in the Western Cape and flash flooding in KZN and Gauteng. 

FURTHER READING: What To Do If You’re Caught Driving In a Flash Flood

13% of all insurance claims in 2017 were due to natural events, and many disputes were about storm damage. 

The biggest problem came about when insurers refused to pay out claims due to the properties already being affected by gradual deterioration. Negligent property owners did not maintain the property properly and had ignored a large amount of wear and tear. Those rejected, who did maintain their property, might not have kept adequate records of any maintenance performed. 

According to the 2017 Ombudsman report:

In general, the Ombudsman will assess these matters by asking whether the loss or damage would have occurred if the property had been properly maintained. If it clearly would have occurred even if the property had been adequately maintained the Ombudsman will usually uphold the claim.

You've Got A Guru To Guide You: Here Are 6 Tips For Choosing The Right Building Insurance!

Possessing Proof Of Your Most Valuable Items

When it comes to household content insurance, the largest number of complaints are usually about how much the insurer is willing to pay out. One of the biggest problems is that, in many instances of household content claims, the insured is unable to provide proof of ownership or proof of value for the lost goods. 

These are reasonable requests from any insurance company. When validating a claim, especially when it comes to high-value items, the insured has to be able to provide these proofs. Therefore, it's always a idea to keep an updated inventory of your valuable home contents and retain all proof of ownership. 

It’s also smart to keep copies of these outside of your home, just in case they are damaged in a fire or taken during a burglary. 

Theft and burglary generally make up around 73% of household content claims, which is massive.

Driving Under The Influence

Without question, the area where insurance companies and clients butt heads the most is when it comes to drunk driving. While the Ombudsman is certainly a champion of the people, most of the claims considered by the Ombud where the driver had been found intoxicated at the time of the incident, are outright rejected.

This is one of those matters upon which eveybody involved (except, perhaps, the guilty party) will always agree.

In order to manage the risks involved with drunk driving, some insurance companies have even implemented ‘take me home’ type services. If one were to look at the DUI statistics of car accidents in South Africa, though, it becomes clear that we have a serious problem.  

Insurance Company Giving You A Hard Time? Sounds Like You Need A Guru In Your Corner!

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