Insurers come to the rescue of expired driver’s licence holders

Transport minister Fikile Mbalula is adamant that the grace period to renew expired driving licence cards will not be extended beyond the end of March deadline which was caused by the closure of driving licence test centres due to Covid-19, faulty equipment and systems, as well as alleged corruption by officials selling online block bookings for bribes.

In response to this situation which has resulted in protests at various driving licence test centres, insurers Old Mutual says it will honour claims from policyholders with expired licences until September 30.

“We are extending the grace period to help our policyholders breathe a sigh of relief,” says Hennie Nortje, CEO of claims, sales and service at Old Mutual Insure.

However, what do other insurers say?

Wynand van Vuuren, client experience partner at King Price insurance, says his company has always been of the view that you will still be insured if your driver’s licence has expired and your renewal is stuck in the current backlog, and an accident or a loss happens.

The important issue to be aware of is the principle of “causal link” — which means the reason for a claim rejection must be directly linked to the cause of the accident or loss, he says. For example, all insurance policies state that your vehicle must always be in a roadworthy condition.

But if your tyres are worn, and someone drives into you while stationary, an insurer cannot reject your claim, as there was no causal link between the worn tyres and the accident. By the same token, if your licence disk has expired, and an accident occurs or your vehicle is stolen, insurers will have to pay those claims, as the licence would not be material to the incident.

What you certainly need to do is renew your licence as soon as possible, and get a temporary licence — but it won’t affect your cover. Just make sure the vehicle is always roadworthy, and there are no additional factors that can cause or contribute to an accident.

Additionally, clients whose claims are rejected by an insurer because they do not have a renewed driver’s licence and rather a temporary licence can report this matter to the ombudsman of short-term insurance as they will not allow for an insurer to reject a claim if the driving ability has not changed and have applied for a new licence which is still to be printed, Van Vuuren says.

Outsurance’s Natasha Kawulesar says driving with a valid driving licence is a legal requirement with the pursuant legal ramifications where this is breached. 

“We require our clients to comply with the legal requirements but are also aware that there may be factors that might result in a client driving while their driver’s licence card has expired. The fact that the licence card has expired does not have an affect on the individual’s driving ability and experience. Where the only concern on a claim is an expired licence card that could not be renewed for a valid reason, the claim will be settled.” 

In addition to customer convenience offered, Outsurance has a new digital feature where both clients and non-clients can log into its app or client portal on the company’s website and complete the process to have their renewed vehicle licence delivered to them. 

“You need to complete a few questions on the app or client portal, accept the quote, make payment and within an average of 14 working days, your vehicle licence is delivered to you,” Kawulesar says.

Dotsure says though it has no specific concession to deal with the licence bottleneck, all road users have to renew their licences regularly. It has Licence Protect which notifies policy holders of licence renewals, and provides a channel to get these licences renewed, with the added benefit of delivering them to clients. 

Anneli Retief, head of Dialdirect Insurance, said: “If a customer does not have a valid driver’s licence at the time of the loss — and this was as a result of a purely administrative process that is beyond the customer’s control, as now experienced by many members of the public, then the expired licence will not affect a claim.

“We look at risk when assessing a claim and an administrative delay does not increase or decrease your risk in operating a vehicle. We do however urge customers to continue in their efforts to renew their licences as soon as possible.”