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.
Jason Snyman
2018-05-10
The 2017 Annual Report of the Ombudsman for Short-Term Insurance has recently been released. The report reveals how satisfied clients are with how insurers handle their claims, as well as tracking disputes between the two. Car claims represented almost half of the 9000+ complaints which the Ombud handled last year. Some 75% of these claims were for accidents. Most of these were rejected due to the insured driver being under the influence of alcohol at the time of the accident. So, insurance companies and their clients don’t always see eye to eye. We took a look at the top disputes between the insurer and the insured, according to the Ombudsman report.
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Bending The Truth When Applying For Car Insurance

One of the leading causes for rejected vehicle claims is misrepresentation. This alludes 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, 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.

Possessing Proof Of Your Most Valuable Items

When it comes to household content, the largest number of complaints are about how much the insurer is willing to pay out. In many instances last year, the insured was 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. It’s not a bad idea to keep an 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 were the reasons behind 73% of household content claims.
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Maintaining Your Property

On that note, last year saw a large amount of storm and fire damage 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. 13% of all claims were due to natural events, and many disputes were about storm damage. The biggest problem came in 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 ignored a large amount of wear and tear. Those who did might not have kept adequate records of any maintenance performed. According to the 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.”
 

Driving Under The Influence

Without question, the area where insurance companies and clients butt heads the most is when it comes to drunk driving. Most of the claims considered by the Ombud were rejected due to the driver being intoxicated at the time of the incident. 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.