A client is under an obligation to ensure that insurance premiums are paid timeously in order to enjoy cover.

Factual Scenario:

Mr L submitted a claim to the insurer in respect of fire damage to his home. Mr L advised that he contacted his broker on the day after the fire to advise of the fire damage. Mr L indicated that he advised the broker that he would need to pay his premium manually as he needed to change banks and had not set up a stop order for the payment of the insurance premium.

The insurer advised that the claim could not be registered as the policy had been cancelled a month prior to the loss due to the non- payment of the premium. The insurer had attempted to deduct Mr L’s premiums for the months of June and July. The premiums were unpaid. The insurer submitted that Mr L had not made any alternative arrangements to pay the premiums.

As the insurer had not received two consecutive premiums and in accordance with the policy provisions, the policy was cancelled.

The insurer submitted that neither it nor Mr L’s broker had been informed that Mr L had changed his banking details. The insurer submitted that Mr L had no cover at the time of the loss. Mr L argued that he had requested to make an EFT payment to the insurer to cover the June and July premiums.

The insurer responded that Mr L’s request to make payment of his premiums had however been done after the premiums were due and after the loss had occurred. The insurer, it argued, was therefore not obliged to accept the late payment of the premiums in this instance. The insurer also stated that there was no indication that Mr L had intended to pay his premiums prior to the date of the loss.

Mr L was under an obligation to ensure that the premiums were paid timeously in order to enjoy cover.

Failure to make timeous payment of the monthly premium entitled the insurer to decline cover for that month. In this instance, due to the unpaid premiums the policy was cancelled.

It was not Mr L’s contention that he had informed his broker of a change in his banking details prior to the loss nor had he provided any proof that he informed his broker or the insurer to change his banking details.

As Mr L’s policy was cancelled a month prior to the loss, he did not enjoy cover for the loss.

OSTI was unable to assist Mr L in his complaint and the matter was resolved in favour of the insurer.

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