Top 5 Reasons Why Insurers Refuse to Pay Claims
Why do some South African insurance companies refuse to pay out claims? Here are the top 5 reasons why insurers refuse to pay claims and what you can do about it in South Africa:
Can an Insurance Company Refuse to Pay a Claim?
Yes, insurers in South Africa can deny your claim, sometimes for valid reasons, and other times unfairly. If your insurance provider or another provider you are claiming from rejects your claim and refuses to pay, there could be many reasons. If you think the insurer is withholding payment of your claim unlawfully or that they denied your claim unjustly, you can do something about it.
Top Reasons Insurance Providers Deny Car Insurance Claims
Non-Disclosure or Dishonesty
Your Vehicle is Not Roadworthy
When you first purchase cover, you are required to fill in forms and disclose information to your insurance provider. If you give them incorrect information or omit certain facts, this is called non-disclosure. Some people intentionally do not disclose information in order to save on premiums, but this practise is fraudulent and should be avoided.
Your insurance provider needs accurate information to provide you with adequate cover. Even if you simply forgot to give them some information, your claim could be denied because it is seen as dishonesty. To avoid this situation, make sure you often give your insurance provider updates on occupational, medical, and lifestyle information. You should also disclose facts like where you park your car, previous judgements, previously rejected claims, and previous breaks in your insurance cover.
South African Law makes clear how our vehicle should be maintained to be considered roadworthy in the National Traffic Act, Act 93 of 1996. If you’re in an accident, and your car is not roadworthy according to this standard, your claim may be denied by your Car Insurance provider. Here is a list of the most important maintenance items to pay attention to according to the law:
- Your car’s odometer and speedometer should be in working order.
- Your car’s chassis should not be damaged or rusty.
- Your car’s doors should open and close easily and be firmly attached to the hinges.
- The lights and indicators should be in working order.
- All seatbelts must function correctly and be in good working order.
- Your car’s windscreen should be free of damage.
- Your car’s shock absorbers must be in good working order.
- Your car’s wheel alignment should be accurate.
- Your car’s engine should show no signs of leaks or damage, including wiring.
- Your car’s VIN number must match up to the VIN number on your Car’s registration document.
- Likewise, your car’s engine number must line up with that on the registration.
- None of these documents may show any signs of tampering.
- Any windows on the car that should be able to open and close must be able to do so.
- Your car’s wipers need to be in good working order.
- Your car’s tyres and wheels should be correctly sized, correctly inflated, and have a tread depth of 1.6mm at least.
- Your car’s brakes should be in good working order.
- Your car’s hydraulics should not be leaking.
- The car’s steering system must be fully operational.
- Your car’s battery should be in good working order and secured properly.
- Your car’s exhaust should not emit excessive smoke or noise.
If you are not sure whether your car meets all these requirements you can take it to a testing centre where it will be assessed for roadworthiness. Points of concern will be noted, and you can address each issue with a mechanic or professional in the area of concern.
You Have Outstanding Premium
Unlawful, Reckless, or Drunk Driving
Unmet Terms in the Policy or Lack of Cover According to the Policy
Part of your agreement with your insurer is that you pay a monthly premium. When premiums are not paid up to date, you will not be covered. Your policy should include a grace period of, for example, 15 days to pay the outstanding amount. If your account has been overdue for a while, this could result in a rejected claim.
If you’re speeding, drinking and driving, or behaving recklessly on the road, you may be held liable if an accident occurs. If you are considered the responsible party in an accident, you will be held responsible to pay the claim amount. Insurers don’t even need to do a blood alcohol test. Evidence like what you spent money on in the hours before the accident can be enough for them to deny your claim.
Insurers do not need to pay your claim out if you are breaking the law or not behaving in what they consider a “safe” way. You can learn more about what your insurance provider expects of you on the road by reading the insurance policy carefully and discussing any questions and concerns you have.
Not all policies include cover for write-offs. There may be other exclusions in the policy document that are similar. Familiarise yourself with what is and isn’t covered and ask questions. Make sure you understand the limits of your cover before you sign.
A car inspection needs to be done by a company approved by the insurer before the insurance provider will agree to cover your car. If this inspection has not been done yet, your claim could be rejected.
There may be other requirements you need to meet like installing a tracker or security device, parking your car in certain conditions, and specifying designated drivers. The driver should, of course, be licensed for your claim to be accepted.
Not all Car Insurance Providers are the same. Some policies will offer you more benefits, and others will be more affordable. Make sure you get Car Insurance from a fair provider who will offer you everything you need.
Prices and statistics quoted are correct at the time this article was published. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.
Sources: fin24; 1Life; Times Live;