Johannesburg – It is important for consumers to read the fine print and understand the contracts they sign.
The Office of the Ombudsman for Short-Term Insurance (OSTI) has recently laid bare the nonchalant approach that consumers have when putting pen to paper.
The OSTI upheld a decision by an insurer to reject a claim on the basis that the insured failed to comply with a property clause in the policy schedule.
The watchdog found that the policy for the insured valuables that are governed by the “close personal custody and control requirement” means that the insured property shall be “held by, worn or attached to the insured at all times whilst in transit”.
The implicated consumer, who cannot be named, was on a holiday when he went to the beach with his wife and child.
He took a bank card, cash, watch and the rings and put them in his wife’s bag for safekeeping. The bag was put in a baby’s pram while they were at the beach.
He said after a few hours they went to a shopping mall and when they opened the closed area of the pram, the bag was missing.
The insurer rejected the claim for the loss of engagement and wedding rings on the grounds that the policy only covered the insured property while away from the insured premises when in the “close personal custody and control” of the insured, within the defined meaning of that expression.
The ombudsman said: “The first issue to be determined is whether the jewellery clause provides cover for the insured under these circumstances. Having regard to the wording of the policy schedule, our view is that it refers specifically to jewellery worth more than R75 000 and it does not flow from the clause that cover is automatic in the event that the jewellery is worth less than R75 000 and is not kept in a safe.”
The ombudsman said the second issue to be determined was whether the insurer correctly rejected the claim on the grounds that the jewellery was not held in the close personal custody and control at the time of the loss.
“It is not in dispute that the rings were in a bag, which was stowed under a pram at the time of the loss. Therefore, the insured did not comply with the close personal custody and control requirement, which the policy declines as shall be held by, worn or attached to, the insured at all times whilst in transit. For the above reasons, the complaint is dismissed.”
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