Claims nightmare after storm
Insurance companies may refuse to pay claimants as damages exceed R500m
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.
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
added that the 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 (firstname.lastname@example.org) 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.