OUT­surance’s print is not fine

CityPress - - News - HER­MAN SCHOLTZ news@city­press.co.za – Rap­port

With OUT­surance’s no-claim bonus “you al­ways get some­thing out”, but it can also land you in se­ri­ous trou­ble.

Dur­ban busi­ness­man Sher­win Jer­rier re­alised this when he claimed for ac­ci­dent dam­age of R608 772 to his Audi R8.

When Jer­rier by chance told the asses­sor he had dam­aged his car a few days ear­lier when he went over a pot­hole and then had a “small” in­ci­dent in front of a res­tau­rant in Amanz­im­toti, the in­surer re­fused to pay his claim.

Jer­rier told the high court in Pi­eter­mar­itzburg he had been des­per­ate not to lose his OUT­bonus – in terms of which you get 10% of all your premi­ums back af­ter three claim-free years.

The pot­hole dam­age was, af­ter all, only R15 000, while his ex­cess for a claim is R20 000. And when he crashed into the back of a bakkie with his Audi, he also de­cided he would rather pay for the dam­age to the ve­hi­cle and his car him­self.

Ac­cord­ing to Jer­rier, he guessed the dam­age to his car would be “about R20 000”, but in the end it was just over R200 000. By the time he re­alised that, it was too late to claim.

So when he had another ac­ci­dent on Jan­uary 22 2010, he did not hes­i­tate to sub­mit a claim for more than half a mil­lion rand.

OUT­surance re­fused to pay. Ac­cord­ing to them, a wit­ness said that, af­ter a round of golf, he had “nine dou­ble brandies and coke” be­fore the ac­ci­dent be­tween Dur­ban and Umh­langa.

But the wit­ness died be­fore the case ended up in court, and OUT­surance could not rely on those al­le­ga­tions.

OUT­surance said Jer­rier should have in­formed them of the pre­vi­ous “in­ci­dents”, even though he never sub­mit­ted a claim. A judge agreed, but Jer­rier ap­pealed to the full Bench of the same court. Judge Ma­hen­dra Chetty, who has now de­liv­ered judg­ment on be­half of the full Bench, was con­sid­er­ably more le­nient.

He said OUT­surance’s poli­cies claimed to be in plain lan­guage, but the fine print was any­thing but sim­ple. It was not clear what “in­ci­dents” one was sup­posed to in­form them about.

He used the ex­am­ple that a scratch by a shop­ping trol­ley in a park­ing garage was also an “in­ci­dent”, though no one would phone their in­surer and tell them about this.

“Is an in­sured also obliged to in­form [the in­surer] about near­ac­ci­dents [which would also be “in­ci­dents”]?” Chetty asked.

This case showed how dif­fi­cult it was for mo­torists to know what “ma­te­rial” in­for­ma­tion they must de­clare to in­sur­ers to avoid prob­lems later, said the judges. Three judges said in­sur­ers would be in­un­dated with in­for­ma­tion if mo­torists had to in­form them about ev­ery “in­ci­dent” for which they were not claim­ing.

OUT­surance was or­dered to pay Jer­rier’s claim.

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