Johannesburg – It is often said that blood is thicker than water, but borrowing your vehicle to a relative can leave a huge hole in your pocket as one consumer recently learned.
Mr X submitted a claim for a motor vehicle accident, which occurred while his cousin was driving the insured vehicle.
Mr X stated that he was visiting his family for Christmas when the cousin took his vehicle without his permission.
He then claims that his fiancé received a call from the tracking company advising him that the insured vehicle was moving.
Shortly after the call, the cousin arrived back at the family home and informed Mr X that he had been involved in an accident.
An accident reconstruction expert calculated that the insured vehicle was travelling at a speed of 139km/h on a road with a maximum speed limit of 60km/h when the accident occurred.
The insurance company then declined to pay for damages to the car.
It relied on a clause in the policy that says it does not compensate for claims for any of the points below:
• Loss or damage to your vehicle, or if you are held liable for another person’s loss, damage, accidental death or bodily injury, when a person that you know such as a friend, visitor, visiting relative or family member residing with you, used your vehicle with or without your consent and failed to adhere to the terms and conditions of this policy.
• Loss of damage caused by materially exceeding national and local speed limits. Mr X then approached the ombudsman for short-term insurance (OSTI).
However, after considering the facts, the OSTI found that the probabilities favoured the conclusion that it was an irresistible inference that the driver foresaw, which existed as a reasonably foreseeable result, namely the loss of control over the vehicle as a consequence of travelling at a speed of more than double the prescribed speed limit.
Tips for consumers
1. Generally, an insurer is not under an obligation to inspect a property before an insurance policy is taken out
2. When applying for a home loan, the bank may assess the property to establish whether the property is of sufficient value to act as security for the loan.
3. It is the insured’s responsibility to ensure that the property is maintained.
4. Depending on the type of construction and the location of your property, the insurer may require additional security measures or fire safety measures to be put in place.
5. With motor vehicle insurance, the insurer may require an inspection certificate and/or a tracking device to be installed in order for cover to commence.
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