South African insurers have denied claims because of this one clause

An increasing number of claims for auto accident insurance are being rejected and contested under a clause in insurance policy, namely the reasonable precautionary clause, according to the Short-Term Insurance Ombudsman (OSTI).

Ayanda Mazwi, senior assistant ombudsman, said that a report of complaint trends conducted by OSTI in November 2021 showed an increasing number of claims for car accidents rejected by insurers due to the insured’s breach of a contractual care obligation.

The clause requires that the insured must use all reasonable care and take reasonable precautionary measures to prevent or minimize loss, damage, death, injury or liability. A breach of the clause by the insured may warrant the dismissal of a claim.

Mazwi said there are several reasons why an insurer can invoke this clause, but it was particularly familiar in cases where the insurer claims that the insured ride above the regulated speed. The question then is whether insurers may reject a claim because the insured drove too hard?

In resolving a dispute of this nature, OSTI will first consider whether the insured was in fact driving too hard. The insurer, because it relies on a breach by the insurer of a policy condition or on an exclusion, bears the burden of proving the breach or exclusion.

It can rely on evidence such as data downloaded from the car’s on-board computer, reports for tracking vehicles, and experts in accident reconstruction.

OSTI said it will consider the reliability of this evidence before the case can be decided. In a recent OSTI case, an insurer was ordered to pay a claim after OSTI found that the conclusions put forward by an accident reconstruction expert were not based on accurate facts.

“In that case, the expert did not consider objective evidence at the scene of the accident and there were substantial inconsistencies in the measurements he used to calculate the speed. Data from the on-board computer and follow-up reports of cars indicating the speed at which the car was traveling at the time of the accident are generally accepted.

“If it is determined that the insured was driving too hard, OSTI will consider the legal principles applicable to the reasonable precautionary clause.”

An insurance policy can, by default, not exclude liability because the insured was negligent. The legal position is that the insurer must prove that the insured acted recklessly. In this context, speeding in itself does not necessarily mean that the insured was reckless. Lawlessness rather presupposes predictability on the part of the insured.

The insurer must present a convincing argument to conclude that the driver had foreseen the possibility of an accident and intentionally considered the danger by taking measures which the driver knew were not sufficient.

Alternatively, the driver simply could not care less that the measures were inadequate and therefore recklessly reconciled with the danger. It is unlikely that a driver will admit recklessness. Therefore, it can be determined by inferior reasoning based on the facts of the case.

In another case considered by OSTI, the insured contested the calculation of speed by the insurer’s expert, but asked the office to decide on the issue of recklessness. OSTI said it analyzed the description of the incident and the conditions under which the insured council.

In his defense, the insured said he was unfamiliar with the road, that the visibility was poor because it was evening and the street lights were not working. Photos of the scene of the accident showed that the insured was driving in a built-up area towards a T-junction.

The insured indicated that he had not foreseen the intersection. When another car suddenly approached from his left side, he had to take evasive actions, causing him to lose control and crash into a tree, the ombudsman said.

It found that only on the basis of these observations should the insured have been careful by regulating his speed to improve visibility and should have maintained a good view of obstacles on the road as a sudden emergency.

“In addition, the traffic sign for speed limit (60 km / h) at a distance in front of the intersection is prominently placed. The insurer’s reconstruction expert has calculated that the insured was traveling at 104 km / h at the time. “

OSTI concluded that, if the calculation of the speed of the expert was proved, the conduct of the insured would be considered reckless. Apparently, the holding and carrying of the insured also found the cause of the accident, because if he had observed the regular speed, he would have been better able to see the intersection, stop and make the turn safely .

For these reasons, the OSTI said it found it in favor of the insurer.

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South African insurers have denied claims because of this one clause

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