Christelle Fourie, MD of MUA Insurance Acceptances, says most complaints are overturned because policy-holders don’t fully understand the terms and conditions and the level of cover provided by their home and car insurance policies.
“Policy-holders need to realise that failing to abide by the stipulations of the insurance contract can result in claims being rejected by the insurer,” she says.
Here are the seven most common reasons why insurance claims are rejected:
- Home contents underinsured
A big problem that many homeowners face when insuring the contents of their home is failing to insure the contents for the correct and updated replacement value. Most people tend to take out a home contents insurance policy and simply renew it every year, without taking the necessary steps to update their level of cover, despite having purchased new contents for their home.
- Poor maintenance
Homeowners who fail to properly maintain their homes face an increased risk of insurance claim repudiations. Most homeowner insurance policies will only cover damage caused by unforeseen events and regard home maintenance as the responsibility of the homeowner so any claims which are determined to be a result of poor maintenance or neglect are most likely to be rejected.
- Defective alarm systems
It’s vital for homeowners to ensure that the home’s alarm system is tested on a regular basis to ensure it’s in working order. All homeowners’ insurance policies will stipulate that it is the policy holder’s responsibility to keep the alarm system in full working condition because if theft takes place as a result of a faulty alarm, then the claim is likely to be repudiated. This includes the alarm battery being flat. With the current load shedding situation in SA, this becomes absolutely critical.
- Unlawful driving
Should a motorist be caught driving under the influence of alcohol and/or narcotic substances, or the driver does not have a valid driver’s licence, they’re considered to be partaking in a criminal offence and their motor insurance cover could be invalidated immediately. In addition, if the driver is caught driving in a reckless and negligent manner or speeding excessively, which resulted in damage or destruction to the vehicle, the related insurance claim or claims are likely to be repudiated.
- Unroadworthy condition of the vehicle
Windscreen wipers that aren’t working properly, or a tyre tread below the legal limit of 1,6mm, are common examples of vehicle conditions that can significantly increase the likelihood of an accident occurring. Should a motorist be involved in an accident and further investigation reveals that any aspect of the vehicle was not in a fully working condition and contributed to the cause of accident, the insurance claim can be rejected on the basis of the vehicle not being in a roadworthy state.
- Secure overnight parking
Requirements for securing a motor vehicle in a garage will differ between insurers; some will accept off-street parking as acceptable while others may stipulate that the vehicle must be kept behind an automatic garage door. Therefore, motor vehicle owners must ensure that the suggested method of security stipulated by the insurance policy is in place. If a motorist parks in an unsecured driveway or on the road, it’s essential that they notify their insurance provider in order to confirm that they’re covered in the event of the car being broken into or stolen.
- Driver not listed as the regular driver
When a motor insurance policy stipulates that cover is only provided for a specific named driver, an insurance claim will only be successful if this driver was behind the wheel at the time of the incident. Should an accident occur while another person is driving the car, the claim may be rejected as the policy only covers the named driver.
A situation that often occurs is parents listing themselves as the regular driver for their children’s cars due to the fact that motorists under the age of 27 typically pay a higher premium because of their higher risk profile. However, despite saving through lower premiums, they could lose out when it comes time to claim, as their claim may be rejected if their child was driving when an accident occurred.