Ombud lets Discovery off hook, adviser to blame for insurance lack
A FINANCIAL adviser has been ordered to pay a client for the loss that resulted from under-insurance for his vehicle and house contents.
Fais Ombud Noluntu Bam made the order despite Discovery Insure admitting making an error with the insured amount when the policy was transferred from Zurich Insure and the insured client signing each page of the policy to certify the information on it was correct.
Mariette Slippens and/or Gen-Assist Insurance Brokers were ordered to pay Marc Hughes from Randburg in Johannesburg R124 960.23.
This represents the full claim of R141 521 minus the Discovery claim settlement offer of R16 560.77.
Bam said Hughes enjoyed cover for R998 250 in terms of the insurance policy he had with Zurich and would have been indemnified in full for his loss that resulted from an armed robbery at his residence but for the conduct of Slippens.
Hughes requested Slippens in April last year to transfer his short-term insurance arrangements with the exact same cover and terms from Zurich to Discovery.
He lodged a claim with Discovery in August last year after the armed robbery but Discovery found during the processing of the claim that Hughes’ house contents were insured for R100 000 compared to R998 250 in his previous Zurich policy. Bam said this meant Hughes was under-insured, which led to Discovery applying the condition of average and adjusting the claim to R16 560.77.
Hughes claimed he did not authorise the reduction of his house contents cover and lodged a complaint with the Fais Ombud when he failed to resolve the resulting dispute between himself and Slippens/Gen-Assist Insurance Brokers.
Slippens confirmed Hughes’ home contents were insured for R998 250 under the Zurich policy and claimed to have sent the Zurich policy schedule to Discovery and requested a quote based on the information in the schedule.
She claimed Discovery erred in capturing the home contents cover as R100 000 instead of R1 000 000 as intended.
Slippens said she sent the quotation to Hughes for his acceptance and the error was only discovered after Hughes submitted his claim.
She claimed Discovery was responsible for the loss suffered by Hughes and should be held liable to pay the claim in full.
Discovery admitted its administrator had in error captured the sum insured as R100 000 instead of R1 million but claimed Slippens should have perused the contents of the quotation and confirmed its correctness before sending it to Hughes.
Discovery said the failure of Slippens to confirm the quotation amounted to negligence.
Bam said the failure of Slip- pens to read the quotation amounted to negligence and a violation of her duties as a financial services provider in terms of the Fais Act.