Thousands of vehicle insurance claims are paid every year – but some are not! Claims can be declined by insurers if the conditions of the policy were not followed, such as not keeping the tyres in a roadworthy condition, or because the driver was speeding. Here are 10 of the most common reasons why insurers could decline your claim.
1. Premiums aren’t up to date
Premiums need to be paid when they are due. If they are not, a policy may lapse. When a policy lapses it is effectively cancelled (there is no cover) and claims are declined. The good news is that, by law, insurers must grant policyholders a grace period to pay outstanding premiums. This period has to be at least 15 days after the premiums were due, with many insurers giving 30 days grace. Check your policy, but know that if premiums are unpaid for longer than the grace period, a claim may be declined.
Enter your name and contact number and one of our consultants will call you back:
2. Non-disclosure or material misrepresentation
You must tell your insurer about previous accidents and claims, and if you have a medical condition such as epilepsy that can affect your driving. If you don’t, when it comes to claim time your insurer can decline your claim on the grounds of non-disclosure.
You also need to keep your insurer up to date on your personal information such as your cell number and address.
3. Unlicensed or unspecified drivers
Some policies only cover the regular driver of the vehicle. Your insurer can decline a claim if someone else has an accident while driving your car or the car is stolen when you are not driving it. Tell your insurer if someone else will be driving your car and give them the driver’s details. And remember, if your car is driven by an unlicensed, unsupervised driver (driving without an instructor or licenced driver, including driving alone with only a learners licence), your insurer can decline a claim.
Keep your licence up to date, apply for a temporary licence if your licence has expired, and keep all documentation relating to renewing your licence, such as attempted time slot booking, on hand.
4. Unroadworthy vehicle
If you have an accident and it turns out that your vehicle was not roadworthy, your claim will be declined. Keep your vehicle in good condition, check out any problems when they occur and service your vehicle regularly, as advised by the car manufacturer.
The basics are to ensure everything works, such as all your lights, security devices, door handles and windscreen wipers. And, importantly, make sure your tyres are the required tread. Worn tyres are a common cause of unroadworthy vehicles, accidents and declined claims.
Below are the items the National Road Traffic Act lists that must be maintained in a specified manner in order to meet the minimum standards of roadworthiness:
- 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. Doors must be easy to open and firmly attached at the hinges
- The speedometer, odometer, seatbelts, lights and indicators must be in working order
- The windscreen must be free of damage, windows designed to do so must open and close and windscreen wipers must work
- Wheels and tyres must be the correct size and tyres should have a tread depth of at least 1.6mm
- Brakes and shock absorbers should be in good working condition, with no leaks from the hydraulic system
- 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 in good working order
- There must be no excessive smoke or noise from the exhaust
You should also know that if the condition of your vehicle was material to the loss, the insurer can not only decline your claim, they can also decline the claim of any third party. For example, if you have an accident and injure a pedestrian because your brakes fail, and your brakes fail because they are worn, damage to your car as well as the pedestrian’s claim may be declined.
5. Driving recklessly or under the influence
Drivers need to exercise reasonable precautions when driving. If you drive under the influence of alcohol you are breaking the law (whether you are tested or not) and your insurer will decline your claim. The same goes for driving recklessly, which is when you don’t show any care for other road users, drive through red traffic lights and don’t stop at stop signs. If you are WhatsApping and driving, you are driving recklessly. Speeding is another no-no. Keep to the speed limits.
And if you have an accident, no matter how small, don’t flee the scene. In the case of bumps and dents you can swap details with anyone else involved and report the accident to the police within 24 hours. If there are injuries, you need to be on the scene until the injured are treated or taken to hospital. Failure to do so could be grounds for declining the claim.
6. No write-off cover
If you have comprehensive car insurance, you are covered for a write-off. If you have third-party cover only, you are not covered for a write-off. Check your policy to see what you are covered for, and if your vehicle is insured at retail value, market value or trade-in value, so you know the maximum amount you can be paid for a write off. Retail value is the amount a dealer or commercial retailer will get if they sell your car, and is usually the higher of the three amounts. Market value is the amount you are likely to receive if you sell your car privately and trade-in value is the amount you are likely to receive when you trade in your car to a dealer.
Also find out if you are covered for the full amount you owe to a finance company, such as your bank, on your vehicle. A common complaint to the Ombud for Short-term Insurance is about claims paid that are less than the amount outstanding on a vehicle finance agreement, which can leave you seriously out of pocket.
7. No tracking and security device
If your insurance policy requires you to have an alarm, immobiliser and tracking device, and you don’t, your insurer can decline a claim for damage or theft. You also need to make sure that any app linked to your tracking device is switched on at all times, or as specified by your insurer. And you are responsible for keeping your vehicle generally secure, including locking doors and keeping the keys in a safe place.
8. Vehicle inspection not carried out
Most insurers insist that your vehicle is inspected when you take out a policy. This is to check for any pre-existing damage. If this inspection is not done, you are in breach of contract and your claim will be declined.
9. Vehicle used for business
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. It excludes any meetings you need to drive to or clients you visit. If you have an accident while driving to a client meeting, and your vehicle is insured for private use only, your insurer can decline your claim. If you insure your car for business use as well, you are covered for these trips.
10. Vehicle not parked securely at night
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 you regularly leave it outside, you will not be paid a claim if it is stolen or broken into.
Keep to your end of the deal
It’s an unfortunate reality that vehicle insurers decline claims. You need to educate yourself on the terms and conditions of your insurance policy and make sure you comply with them. Ask your insurer or financial adviser if you are unsure of anything in your policy. And remember to read all communication from your insurer as these may cover changes to your policy and cover.
Follow these tips to reduce the chances of your claim being declined:
- Read the fine print
Know and understand the terms and conditions of your policy including 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 previous accidents, who will be driving the car and if the car will be used for business purposes. - Keep your vehicle well maintained
Keep up to date with services and maintenance and have a record of these to show your insurer. - Drive responsibly
Any reckless behaviour that leads to an accident could see your claim being rejected, so obey the law and the rules of the road. - 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.
Where to get help
If you believe your claim has been unfairly assessed or declined, you can lodge a complaint with the Ombudsman for Short-term Insurance. Visit www.osti.co.za for additional information.
Sources: Liana Reiners, Ombudsman for Short-term Insurance, Gumtree, Fin24, AASA, Arrive Alive
Original article published on: April 26, 2017
Updated on: January 30, 2020
Updated on: April 13, 2021
Updated on: May 30, 2022
Updated on: June 15, 2023