Insure, or you’ll pay the price
Without car cover, damage costs will be yours to bear
REGULAR readers of this column will be familiar with tales of insurance industry abuses. They are not difficult to find.
But no matter how badly some in the industry behave, insurance remains a necessary evil, especially car cover.
Accidents happen daily, and it seldom matters who is to blame — the damage has to be paid for. And if you are uninsured, it is most likely you who will pay for it.
Too many consumers make the dangerous assumption that the person who caused the accident will be insured and will pick up the tab for repairs. Not so.
First, there is no guarantee that the other driver will be insured. And even if he is, there is no guarantee his insurer will agree to pay your third-party claim.
The other driver is that insurer’s priority, not you and your crumpled car. And deter- mining who is to blame for a collision is not as straightforward as it seems.
It gets worse. The short-term insurance ombudsman cannot help. Third-party claim disputes do not fall under his jurisdiction. So, unless you have spare cash under your mattress to cover your damages — or worse, a write-off — think seriously about forgoing car insurance to save a few bob each month.
If you are still not convinced, today’s two cases should do the trick.
Peter Scullard’s uninsured 2002 Jeep Cherokee was parked outside a supermarket in Eerste River when another car collided into it and at least three other stationary cars in the same parking lot.
After submitting his claim for R28 000 to the other driver’s insurer, Anderson Insurance, he was told that the client was unconscious at the time of the accident, had not acted negligently and the claim would not be paid.
“On investigating further myself, I found two witnesses that claimed the woman had been on her cellphone at the time of the accident,” said Scullard.
One witness told Scullard the woman claimed her clutch had got stuck, but when the witness moved her car for her, he saw it was an automatic car with no clutch.
I asked Anderson to investigate. It declined.
Leeann Minnaar of its legal department said it had a responsibility to trust its policy- holder’s “version of events”.
“Any information that is contrary to our policyholder’s version needs to be tested in a court of law,” said Minnaar. “By entertaining such information, we enter the realm of hearsay . . .”
She said although Anderson, which had settled its client’s claim, sympathised with Scullard’s frustration, the correct approach in pursuing compensation was for him to seek legal counsel.
Seriously? No interest whatsoever in checking on a policyholder’s potential dishonesty?
Even though disputes between an insurer and a nonclient fall outside the ombudsman’s mandate, I asked senior assistant ombudsman Peter Nkhuna to shed some light on Anderson’s response.
“Insurers generally owe no obligations to third parties and are under no obligation to assist a third party to prove their claim,” said Nkhuna. “They, in fact, have an obligation in circumstances like these to defend any [perceived] illegitimate claims against their clients.”
He said most insurers would be liable only if the insured was legally liable or responsible for the accident. So if the insured had admitted using a cellphone, most policies would provide cover and pay for own damages as well as third-party damages.
“If the story about the cellphone is factually correct, this would suggest that there was probably negligence on the part of the insured driver and the complainant would therefore probably succeed with his claim. The outcome would ultimately depend on whether the third party could prove his version of the incident.”
In the end, the only available recourse for Scullard was through the courts, he said.
As for the alleged fib to the insurer about blacking out (why lie?), Nkhuna said many consumers responsible for causing an accident mistakenly believed their insurer would not cover their damages if they told the truth. Not so.
“The standard comprehensive insurance policy covers the insured even if they have been negligent. It’s one of the main reasons why people have insurance.
“Unfortunately, owing to this misconception, the insured lies to both the third party’s detriment and indirectly their own, as the third party may then keep on approaching them to recover their loss when the insurer would have simply paid out the claim based on the client’s version.”
Soweto IT technician Lillian Lenong is in a similar position. A driver hit her 2006 Renault Clio on the M1 south after she had broken down in the slow lane in daylight. She said she switched on her hazard lights and placed a warning triangle behind her car.
Despite this, the other driver’s insurer, Santam, refused to pay her R33 000 claim, saying the warning sign had not been positioned. However, Lenong said witnesses could testify that the hazard lights and sign were used.
“Santam treated me badly just because my car is not insured, and I don’t have enough money to get legal assistance. Please help me to get Santam or the insured to pay me.”
Santam’s head of specialist
The standard policy covers the insured even if they have been negligent
claims, Theuns Kotze, said the facts and witness testimony submitted were carefully considered and the company concluded that its client was not the cause of the accident through negligence, as alleged.
Lenong, like so many drivers, chose not to insure her car, claiming she was “a safe and cautious driver” and could not afford the premiums.
In the end, she had to foot a R33 000 repair bill for damages to a car she was not even driving at the time. Ditto Peter Scullard.
In both cases, insurance would have been a wiser — and certainly cheaper — option.