CASE STUDY: You’ll be caught out eventually

A case study from the Short-term Insurance Ombudsman’s 2016 report illustrates that if you bluff your insurer, your actions will eventually catch up with you.

Mr A claimed for the loss of his car following what he said was a hijacking. His insurer, Mutual & Federal, rejected the claim, saying Mr A provided false information at the time of the claim and had failed to disclose important facts about his insurance history when he took out the policy.

Mr A reported that he had driven to visit a colleague five minutes away from his house in Khayelitsha. On the way home, he gave an old man a lift to a nearby suburb, Harare. After dropping off the old man and before he could drive off, he was approached by two men, who beat him up and hijacked the vehicle.

Mr A said the perpetrators had strangled him until he passed out. He later found himself dazed, walking to his cousin’s house.

On arriving at his cousin, Mr A did not contact the police or his wife. He said that his cellphone had also been stolen. The next day, his cousin helped him report the incident.

Mutual & Federal’s assessor confirmed during the investigation that Mr A did visit his colleague, but said Mr A gave a different version of the story compared with his report on the claim form.

Mr A’s vehicle was later found burnt out and badly damaged.

It was discovered that Mr A had submitted an almost identical claim two years earlier, which had been settled by a previous insurer.

Mutual & Federal argued that Mr A had failed to inform it when he took out the policy that he had had policies cancelled by two previous insurers. The insurer also argued that, in its view, Mr A had staged the hijacking.

The ombudsman upheld the insurer’s decision to reject the claim on the grounds that Mr A had not disclosed his insurance history at the inception of the policy and after taking into consideration the discrepancies in the circumstances surrounding the incident.