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Pin the claim on the donkey … and other lessons from insurance ombuds

Pin the claim on the donkey … and other lessons from insurance ombuds
Neesa Moodley
By Neesa Moodley
7 Jul 2024
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A report highlights cases where policyholders complained about claims being rejected. From children at the wheel to asses on the road, there’s valuable information for consumers.

Each year, the long-term and short-term insurance ombuds release a joint annual report reflecting on the past year – 2023 will be the last year they do this as the two offices, along with the banking ombud and the credit ombud, will be merged into one office – the financial services ombud.

The two ombuds also highlight notable cases with important lessons for consumers:

Who is really the regular driver of the car?


This case has important implications, particularly for parents with children who use their cars. In this case, the complainant submitted a claim for accident damage to their car while their daughter was driving it.

The insurer rejected the claim because the correct “regular” driver’s details were not disclosed when the policy was taken out. The address supplied was not where the car was kept most of the time – it was mainly at the address where the daughter stayed.

When the insurer interviewed her, the daughter admitted that she drove the car most of the time. Assistant ombud Kishendren Pillay said the evidence showed that the complainant had lied to get a lower premium. If the insurer had been told the daughter was the regular driver, the risks would have been rated differently based on her age, and the premium would probably have been higher. The ombud upheld the repudiation of the claim.

Meeting the conditions of cover


In this case, the insured was driving when he collided with a donkey. The insurer’s internal investigator found that the insured had not provided the insurer with a vehicle inspection certificate as required when he took out the policy. In fact, he had never taken the vehicle for an inspection at all.

This was a special condition of the policy, which stated: “Should the vehicle not be inspected, we reserve the right to amend the terms of the policy or cancel cover.”

Assistant ombud Janitra Hollenberg said the vehicle inspection was required for two reasons – to confirm the vehicle existed and to confirm the condition of the vehicle to prevent claims being made for pre-existing damage.

However, she also said the assessor would have been well qualified to identify any pre-existing damage and the insurer would then have been able to exclude any such damage from any settlement. In this case, she said, the insurer had not proved any prejudice or materiality as a result of the insured’s failure to have the vehicle inspected. The ombud recommended that the insurer settle the claim, which it did.

Severe illness – recurrence of cancer


The insured was diagnosed with stage 1b cancer of her right breast in 2014. She underwent chemotherapy and had a mastectomy before she went into remission.

In September 2016, she joined her employer’s group scheme, underwritten by Discovery Life. In December 2020, she was again diagnosed with stage 1b cancer of her right breast and submitted a claim.

Discovery Life rejected the claim on the basis that it related to a condition from 2014 – before she joined the group scheme. The ombud made a provisional ruling, noting that the claim was not based on the 2014 event, so the risk in 2014 was irrelevant and did not justify the repudiation of the 2020 cancer claim.

Discovery Life’s response was that it was never “within its contemplation” that the member would be entitled to claim for the exact same stage cancer, in the same organ that presented prior to commencement of the benefit (when she joined the scheme).

In a final ruling, the ombud pointed out that no legal or insurance principle exists that prevents an insured from claiming for a recurrence of a condition.

“If the insurer wanted to exclude claims of this nature, it had the opportunity to incorporate an exclusion in the policy to that effect.” Discovery Life accepted the ruling and paid the claim. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.


You may write a letter to the DM168 editor at [email protected] sharing your views on this story. Letters will be curated, edited and considered for publication in our weekly newspaper on our readers' views page.

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