OUTsurance’s print is not fine
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.