TOP WAYS TO AVOID INSURANCE CLAIM REJECTIONS

 

Christelle Fourie, Managing Director of MUA Insurance Acceptances

The 2014 Short-Term Insurance Ombudsman Report released last week revealed that the ombud received a total of 10 253 formal complaints over the past year – with the majority of the complaints being related to home and motor insurance. The report also revealed that only 31% of the complaints submitted were overturned by the ombud’s office.

 

The 2014 Short-Term Insurance Ombudsman Report released last week revealed that the ombud received a total of 10 253 formal complaints over the past year – with the majority of the complaints being related to home and motor insurance. The report also revealed that only 31% of the complaints submitted were overturned by the ombud’s office.

While the report detailed the number of claim rejections that were overturned, many of the complaints that weren’t overturned were largely as a result of policyholders not fully understanding the terms and conditions stipulated in their home and motor insurance policies, which often resulted in the claims being rejected by their insurer.

In understanding the level of cover provided by their insurance, as well as the circumstances required for the claim to be accepted, consumers will be able to avoid insurance claim rejections. The reality is that insurance claims will only be rejected if consumers deviate from the conditions as stated in their insurance policy.

Below are some of the common reasons why insurance claims could be rejected by most insurance providers:

Home contents underinsurance

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, thus any claims determined as a result of poor maintenance, or neglect, are most likely to be rejected.

Defective alarm systems

It is vital for homeowners to ensure that the home’s alarm system is tested on a regular basis to ensure it is 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 loadshedding in South Africa, this becomes absolutely critical. 

Unlawful driving

Should a motorist be caught driving under the influence of alcohol and/or narcotic substances, or the driver no longer has a valid driver’s licence, they are 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(s) are likely to be repudiated.

Unroadworthy condition of the vehicle

Windscreen wipers that are not working properly, or a tyre tread below the legal limit of 1.6mm, are common examples of vehicle conditions which 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 an 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 is essential that they notify their insurance provider in order to confirm they are 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.

By bearing the above in mind and properly reading through insurance policies, consumers can educate themselves in an effort to face a lower risk of common insurance claim rejections.