Traffic backs up on Johannesburg’s N1 North. Picture: FINANCIAL MAIL
Traffic backs up on Johannesburg’s N1 North. Picture: FINANCIAL MAIL

Consumers are often surprised to learn that insurers can prove reckless driving and reject claims for motor vehicle damage in such instances, says the deputy ombudsman for short-term insurance, Edite Teixeira-McKinon.

She was commenting on a significant increase in motor insurance complaints by policyholders to her office about claims rejected by short-term insurers because policyholders failed to exercise due care. These types of complaints have increased 48% when compared to 2017.

Many policy contracts oblige you, as the insured, to take care to avoid an accident or damage to your goods.

Failure to take due care can entitle an insurer to reject a claim if it can prove that this is what caused the loss or damage to the insured property.

The statistic was revealed in the annual report of the ombudsman for short-term insurance for 2018, which was released this week.

"We have seen a spike in claims being
rejected by insurers on the basis of reckless behaviour or reckless driving in motor claims," says Teixeira-McKinon.

The insurers back up their claims with either tracking reports that indicate the speed at which the vehicle was travelling just before impact or with reports prepared by accident reconstruction experts appointed by the insurer when they suspect reckless driving is the cause of an accident. Insurers also rely on information from witnesses.

To succeed with a rejection, all the insurer needs to show is that on the balance of probabilities the conduct of the insured driver was reckless - and not beyond a reasonable doubt, which is the criminal burden of proof.

Unless policyholders can come forward with expert evidence to challenge the findings of the insurer's expert, the ombudsman has no choice but to uphold the rejection of such claims, she says.

Having an accident while travelling at excessive speed can result in extensive damage to a vehicle compared to the damage caused when somebody is travelling within or at the speed limit, she says.

Driving under the influence of alcohol is a different exception to cover in policies, but an insurer may, depending on the circumstances of the accident, also reject these claims on the basis of a lack of due care - acting with due care being an obligation imposed on policyholders in their contracts.

In one case, the driver of a vehicle drove straight over the island in a traffic circle and hit a wall on the other side. The insurer
suspected the driver was drunk but because it did not have sufficient evidence to reject the claim on this ground, it rejected the claim for damages on the basis of a lack of due care.

The ombudsman's office upheld the rejected claim.

Teixeira-McKinon warned motorists not to drive recklessly because they face being responsible for expensive repairs to their own motor vehicle as well as paying for the damages to the home or vehicle of third
parties.

Claims successfully rejected on the basis of a lack of due care or recklessness have huge financial implications for consumers, she says.

Complaints relating to insurers rejecting claims because of drunk driving decreased by 15% last year compared with the previous year, according to the annual report.

But, the report notes, driving under the influence remains a very real problem for the insurance industry and the ombudsman's office cautions consumers that their claims may be rejected and justified on circumstantial evidence, even if they have not been tested for alcohol consumption or convicted of a criminal offence in relation to the incident.

When driver added engine insult to sump injury

● In a case handled by the ombudsman for short-term insurance last year, reckless behaviour caused by driving a vehicle away from an accident scene — with the aim of reaching a service station — caused a policyholder to lose out on a R200,000 claim for accidental damage to his vehicle.

Mr B was involved in an accident on Johannesburg’s Jan Smuts Avenue at about 6pm last August after he swerved to avoid a large pothole in the road, and collided with a road divider.

His car came to a standstill just after a sharp bend in the road and, to avoid the chance of other vehicles crashing into him, and in the interests of his own safety in an area he described as well-known for smash-and-grab incidents, he decided to drive to a nearby service station.

He drove the vehicle a further 800m from the collision site before the engine stalled.The insurance assessor’s report stated that the engine sump was damaged as a direct result of impact from the collision and this portion of Mr B’s claim of about R66,000 was authorised.

However, the report also stated that the vehicle sustained engine damage of more than R200,000. This was because the engine seized up as a result of being driven without oil — the sump damage having resulted in a loss of engine oil.

Warning light

The assessor said the loss of oil pressure would have been immediately indicated on the vehicle’s dashboard’s oil pressure warning light to alert the driver to turn off the engine to prevent any further damage. Mr B confirmed that he noticed a number of warning lights on the vehicle’s dashboard and saw that the vehicle was not responding well after the collision, but he drove on in the interest of safety.

He said he was unaware that there might have been an oil leak that could cause major damage.The insurer rejected the R200,000 claim for the engine damage on the basis that Mr B had a duty to take reasonable care to prevent further damage to the vehicle after the collision.

The ombudsman upheld the insurer’s decision.

Driving a vehicle from the accident was not in itself an indication of recklessness,and whether Mr B was aware that the engine was leaking oil was immaterial to the case, ombudsman Deanne Wood said in the ruling.

It is a well-known fact that a vehicle is in danger of major mechanical damage when it displays a warning light on its instrument cluster. A driver is expected to familiarise himself with the essential aspects of a vehicle’s manual.

At the very least, a reasonable person would know to stop the vehicle and switch off the engine, she said. When Mr B continued to operate the vehicle, he courted the danger of a separate cause of damage which amounted to recklessness, she said