Every year, thousands of vehicle insurance claims are either partly or completely rejected by insurers because of policy exclusions or a breach of conditions. Here are 10 of the most common reasons why insurers could reject your claim.
One of the main reasons why claims are rejected is because of unpaid premiums. The good news is that, by law, insurers are obliged to have a clause in their policy which grants consumers a grace period to pay the outstanding premium. This period may not be less than 15 days but may be longer so check your policy. Whatever the case may be, making sure that payments are made timeously and regularly is the best way to avoid finding yourself without cover.
Some policies only cover the regular driver so if someone else will be driving your vehicle, you need to specify exactly who will be using it. Also, if the vehicle is involved in an accident while being driven by an unlicensed driver, the claim will be rejected.
Remember that insurance premiums are based on the risk profile of the driver, so any misrepresentation of driver details – or these details not being kept up to date – could be grounds for the insurer to reject the claim.
If you have an accident and it turns out that your vehicle is not in a roadworthy condition, your claim will be rejected. The National Road Traffic Act 93 of 1996 contains a list of items that must be maintained in a specified manner in order to meet the minimum standards of roadworthiness:
- Very briefly, for a vehicle to be considered roadworthy the engine and VIN numbers must match those on the registration document and there must be no sign of tampering.
- There must be no damage or rust present on the body or chassis, while doors must be easy to open and firmly attached at the hinges.
- The speedometer, odometer, all seatbelts and all lights and indicators must be in working order.
- The windscreen must be free of damage, windows designed to do so must be able to open and close and windscreen wipers must be operational.
- Wheels and tyres must be the correct size and tyres should have a tread depth of at least 1,6 mm and brakes should be in good working condition, with no leaks from the hydraulic system.
- The same goes for shock absorbers.
- Wheels should be properly aligned and the steering system fully operational.
- The engine compartment – including wiring – must show no signs of damage or leaks.
- The battery must be properly secured, and the transmission must be in good working order. Finally, there must be no excessive smoke or noise from the exhaust.
According to the Ombudsman for Short-term Insurance, neglected tyres and braking systems are most often to blame for claims being rejected.
Vehicle owners should also be aware that if the condition of the vehicle was material to the loss, the insurer is entitled to not only repudiate the insured’s claim for damage or loss, but also the claim of any third party.
Your insurance policy contains something called the Failure To Take Care clause, which refers to reckless driving. This means that if you were driving recklessly your insurer might refuse to pay out your claim. There is also a Breach Of Road Traffic Regulations clause, so if for example you were speeding at the time of the accident, your claim might also be rejected. It goes without saying that if you are involved in an accident while driving under the influence of alcohol, your claim will not be paid out.
Also, relevant here is unlawfully leaving the scene of an accident. Legislation prescribes that a driver involved in an accident where a person or animal is killed or injured or any property (including another vehicle) is damaged, must stop the vehicle to ascertain the extent of any damage or injury sustained and report the accident to the relevant police department within 24 hours of it happening (unless prevented from doing so because of injury). Failure to do so could be grounds for rejection of the claim.
Unless write-off cover is clearly stated in your policy, your insurer will not be liable if your vehicle is written off in an accident.
Telematic devices are used to track and recover your vehicle if it is stolen but can also be used to monitor your driving. Some insurers insist on the fitment of a telematics device and if it is found, for example, that bad driving or speeding caused an accident, your claim might be rejected. On the bright side, some insurers use telematics to reward good driving.
If your insurance cover is conditional upon the fitment of a satellite tracking device and you fail to comply, your claim will be rejected. The same goes for alarms, immobilisers and gear locks.
Most insurers insist that your vehicle is inspected on inception of the policy. This is to check for any pre-existing damage to the vehicle. If this inspection is not done, you are in breach of contract and your claim will be rejected.
Most vehicles are insured for private use, which includes using it to get to and from work on a daily basis as well as for social purposes. If, however, you will be using the vehicle during the day to perform your work duties, this will have to be disclosed.
Business use includes travelling to clients or attending meetings outside of your primary place of employment.
Insurers want to know where your vehicle is parked at night. If you state that your car is parked securely in a locked garage at night, but it is found that you regularly leave it outside, you will not be paid out if it is stolen or broken into.
It’s an unfortunate reality that vehicle insurers do deny claims. It’s up to you, the consumer, to educate yourself on the terms and conditions of your insurance policy and make sure that you comply with them. Follow these tips to reduce the chances of your claim being rejected.
Read the fine print: Make sure that you are familiar with and understand the terms and conditions of your policy. This includes items such as the excess, exclusions and whether other drivers are covered.
Be honest and upfront: Don’t withhold any information from your insurer. Be honest about who will be driving the car and if the car will be used for business purposes. Disclose any accidents you have claimed for in the past.
Keep your vehicle well maintained: If your vehicle is deemed to be unroadworthy in any way your claim will be rejected so keep up to date with services and maintenance.
Drive responsibly: Any reckless behaviour that leads to an accident could see your claim being rejected so don’t drink and drive, obey the rules of the road and don’t speed.
Stick to your promises: If you stated, for example, that the vehicle is kept in a locked garage at night, don’t park it outside.
If, however, you feel that you complied with all the terms and conditions of your policy and your insurance claim has been unfairly rejected, you can lodge a complaint with the Ombudsman for Short-term Insurance. Visit www.osti.co.za for additional information.
Sources: Ombudsman for Short-term Insurance, Gumtree, Fin24
The views and opinions expressed in this article are those of the authors and do not necessarily represent or reflect the views of 1Life or its employees.
Original article published on: 26th April 2017
Updated on: 6th December 2018