Johannesburg – Ombudsman for Short-Term Insurance (OSTI) recently dealt with an interesting matter relating to a car stolen out of the province that the owner lived.
On July 21 last year, Mrs M’s car was stolen while she was staying with her brother in Brakpan, east of Johannesburg.
Mrs M submitted a claim to the insurer and on August 14 she was informed that her claim had been rejected because she had failed to update her residential address, from Bloemfontein to Brakpan, with the insurer.
She then approached the insurer’s internal dispute officer to express her dissatisfaction with the outcome of her claim.
On September 4, Mrs M was informed that the initial decision to reject her claim was overturned and that the insurer would settle the claim on a proportional basis by deducting the percentage of the premium that would have been paid to the insurer if Mrs M had updated the address on the policy. The insurer explained to her that the reason it had deducted 29.12% from her claim was because she had been based in Brakpan for two months and had failed to inform the insurer about the change of her risk address during that period.
The insurer said that since it had only received 70.88% of the correct premium, it would only pay 70.88% of the claim. Mrs M refused to accept the insurer’s explanation, arguing that the insurer was not acting in good faith and deemed its decision to be unfair because she was initially visiting her family. She said she had no choice but to remain in Gauteng due to the Covid-19 pandemic lockdown.
Mrs M requested a full pay-out of her claim. She then approached OSTI for relief, which noted that Mrs M did not move to Gauteng permanently but was forced to extend her stay in the province due to the national lockdown.
The vehicle had been at the “new” risk address for only one month before being stolen and, therefore, OSTI was of the view that a proportional settlement was inappropriate. OSTI requested the insurer to rather settle the claim by deducting the actual difference in premium for the month that the vehicle was at the “new” risk address. The insurer agreed and settled the claim accordingly.
If you’re not finding joy with your insurance claim, first lodge a complaint with your insurer and keep copies of all correspondence between you and your insurer.
If you are not happy with your insurer’s approach, you can complete the OSTI’s complaint form and send it back to them by post, fax or e-mail.
You can also lodge a complaint online. Please visit their website and click on “Lodge a Complaint” and follow the easy prompts. If you would like to lodge a complaint or require assistance, you can contact the OSTI office by calling 011 726 8900.
The OSTI’s services are free of charge.
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