Four lessons from the Momentum saga
Understanding nondisclosure and why you should never withhold information from an insurer
The Momentum uproar gripped the country this past week, as South Africans rallied to condemn the insurer for initially refusing to pay out a R2.4m life claim to a hijack victim. At the heart of the saga is nondisclosure of information that could either determine your risk, premiums and payout or influence whether the assurer would or would not provide life cover. In the Ganas case, Momentum rejected the claim based on nondisclosure of high blood sugar and argued that the contract was entered in bad faith. The public cried foul as the cause of Nathan Ganas’s death was very far removed from high blood sugar - he died in a hail of bullets protecting his wife during a hijacking at their home near Durban. Momentum was pressured into reviewing its decision and decided to among others pay the claim from shareholder funds (instead of from the policy book) and launched a new product that would pay out up to R3m to victims of violent crimes. Although Momentum had support from industry insider...