Claims night­mare after storm

In­sur­ance com­pa­nies may refuse to pay claimants as dam­ages ex­ceed R500m

The New Age (Gauteng) - - KWAZULU-NATAL NEWS - SIHLE MAVUSO sih­lem@the­newage.co.za

AS DUR­BAN and other parts of the prov­ince pick up the pieces after Tues­day’s dev­as­tat­ing storms and floods, more headaches and trauma await some home and busi­ness own­ers as their claims may be re­jected by in­sur­ance com­pa­nies.

Es­ti­mates show that in­sur­ance com­pa­nies might have to cough up to R500m to com­pen­sate peo­ple whose homes, busi­nesses and ve­hi­cles were dam­aged in the disas­ter that has so far left 14 peo­ple dead.

Some of those who may face re­jec­tion from in­sur­ers are those who skipped their pay­ment for the month of the disas­ter (Oc­to­ber pre­mi­ums, un­less oth­er­wise stated, are paid at the end of Septem­ber) and those whose prop­er­ties were dam­aged due to their fail­ure to ex­er­cise “due care” to pre­vent dam­age in the event of a storm.

Ac­cord­ing to the om­buds­man for short­term in­sur­ance, some of the re­jec­tions may be jus­ti­fied, but an in­sured party may seek re­dress if she or he feels robbed or un­fairly turned down by an in­sur­ance com­pany.

Edite Teix­eira­Mck­i­non, the deputy om­buds­man, said while the storm was a nat­u­ral disas­ter, an in­sur­ance com­pany can­not refuse to pay by claim­ing that due to the large vol­ume of claims, they may be bankrupted and de­cide to re­ject all claims.

“No, but in­sur­ers can re­ject claims if they can prove that the dam­age was not the direct re­sult of or caused by an in­sured peril, such as a storm, but due to, for ex­am­ple, ne­glect or a lack of main­te­nance and/ or wear and tear, which dam­age is not cov­ered by a pol­icy of short­term in­sur­ance,” she said.

Asked by The New Age about how many missed pay­ments would jus­tify re­fusal by an in­sur­ance com­pany to com­pen­sate a home or busi­ness owner who lodges a claim, she said in most cases, it’s when the pol­icy holder skipped a pre­mium pay­ment on the month of the disas­ter.

“Gen­er­ally, if the pre­mium for the month of the loss or dam­age is not paid, there is no cover for the loss or dam­age,” she said.

Teix­eira­Mck­i­non added that the

In­sur­ers can re­ject claims if they can prove that the dam­age was not the direct re­sult of or caused by an in­sured peril but due to ne­glect

om­buds­man was there to re­solve dis­putes be­tween in­sur­ance pol­i­cy­hold­ers and in­sur­ance com­pa­nies.

She stressed that hold­ers must first ex­haust all in­ter­nal re­dress sys­tems be­fore com­ing to them.

“Es­ca­late the mat­ter with the in­surer. “Should the in­sured still be dis­sat­is­fied with the out­come, ap­proach our of­fice via email (info@osti.co.za) or call 011 726 8900 or 0860 726 8900.

“Peo­ple can also visit our web­site, www.osti.co.za, for the ap­pli­ca­tion for as­sis­tance form,” she said.

INDISPUTABLE CLAIMS: Cars were sub­merged un­der wa­ter when storms bat­tered Dur­ban. In­sur­ance com­pa­nies are look­ing a lit­tle green around the gills at the high level of pay­outs.

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