Your insurance claim may be declined if you were driving recklessly

The claim

The complainant in this matter was the insured’s brother and the executor of the late insured’s estate.

The complainant approached this office for assistance concerning a claim for a motor vehicle accident in which the late insured and the late insured’s passengers were fatally injured. The claim was rejected by the insurer on the basis of a lack of due care, reckless driving and over-speeding.

The complainant approached OSTI for assistance.

The insurer’s defense

In response to the complaint, the insurer argued that the complaint was time-barred because the complainant did not approach OSTI within the time periods stipulated in the policy for challenging the outcome of a claim.

The policy contained the following conditions:

IMPORTANT TIME LIMITS

You must inform us about any event that could give rise to a claim within 30 days. If we don’t pay your claim or if you are not happy with the amount we agree to pay for your claim under this policy, you can write to us about your complaint within 90 days of the notice in writing of our decision regarding your claim. After the 90 days, you have a further 180 days in which you can start legal action against us, after which your rights to pursue the matter will be forfeited.

The time limits also appeared in the rejection letter:

“In the interest of fairness and absolute impartiality, if you in any way feel that our decision is unjust, we draw your attention to your right to approach our Internal Ombudsman within 90 days of receiving the notice in writing of our decision regarding your claim…”

“Should you wish to dispute the finding of our Internal Ombudsman, you have a further 6 months after expiry of the 90 days in which to pursue the matter either at court or an Ombudsman, after which your rights to pursue the matter will be permanently forfeited. You can contact the Ombudsman for Short Term Insurance on 011 726 8900. We again undertake to abide by their decision.”

The insurer stated that the claim was rejected on 21 November 2019. The complainant was advised that he must provide the insurer with a power of attorney before his complaint could be investigated. However, the complainant failed to comply with the insurer’s request. The insurer did not investigate the complaint any further.

The insurer attempted to contact the complainant in February 2020 to again request the power of attorney, but was unsuccessful.

The insurer stated that it only received further correspondence from the complainant through the complaint lodged with the OSTI, which was received on 20 February 2021.

The insurer argued that the complaint was time-barred as the complaint was not submitted to OSTI within the time periods set out in the policy.

The insurer also provided a copy of the tracking report from the tracking device in the insured’s vehicle. The tracking report indicated that the vehicle was travelling at speeds between 160
km/h and 186 km/h in a 100 km/h zone seconds before the collision.

The insurer submitted that in the absence of any version of how the accident occurred, the insurer could only rely on the objective evidence before it. This was a single-vehicle accident.

An assessment of the damage indicated that the vehicle had overturned. There were no salvageable parts from the wreck.

The insured exceeded the speed limit by speeds of as much as 86 km/h. Considering the extent of the damage and the speed travelled, the insurer was of the view that the insured was not merely negligent and that the only inference that could be drawn was that the insured was driving recklessly.

The complainant challenges the insurer’s decision

The complainant advised that his mother was initially appointed as the executor of the late insured’s estate. The late insured’s mother was handling the claim with the insurer. However, the late insured’s mother subsequently passed away. The complainant had to apply to court to be declared the executor of the late insured’s estate. This resulted in a delay in the submission of the complaint to our office.

The complainant also stated that he was not satisfied with the insurer’s answer to the complaint. The complainant stated that the tracking report could not be relied on because there was no indication from which tracking company the report came and the report did not have the insured’s name on it.

OSTI’s findings

OSTI found that the complainant had shown good cause for his delay in pursuing the rejection of the claim and condoned the late submission of the complaint.

OSTI then proceeded to consider the merits of the claim.

The policy contained the following provisions which were relevant to the claim at hand:

TAKING CARE

You and your family members residing at the insured property or any person covered under this policy must take all reasonable steps to avoid any accident and to prevent loss or damage to
everything which is covered by this insurance and to keep all the property insured in good condition.

If you do not, a claim may be rejected or payment of the claim could be reduced.

CRITERIA WHICH WE CONSIDER WHEN ASSESSING YOUR CLAIM

If the driver of the vehicle exceeds the speed limit by more than 40km/h, we may consider declining the claim. This accords with the spirit of the National Road Traffic Act.

The provision that requires a policyholder to take reasonable steps to prevent loss or damage does not preclude a claim by the insured even if he drove negligently at the time of the collision.

The insurer must prove on a balance of probabilities that the insured’s conduct was reckless in that he recognised the danger that existed and proceeded with his course of action, not caring whether the danger is averted. The question to be asked is not what the insured should reasonably have foreseen, but rather what he actually foresaw, how he in fact reacted, and his state of mind in conducting himself as he did (Santam v CC Designing BK 1998 4 All SA 70 (C) at 81).

There was no evidence of what went on in the insured’s mind shortly before the collision.

Therefore, OSTI resorted to inferential reasoning based on the information available.

The insurer provided the complete tracking report which contained the name of the tracking company as well as the license plate number of the insured’s vehicle. OSTI was satisfied that, on the face of it, the tracking report belonged to the insured’s vehicle.

The tracking report showed that the insured was travelling at extremely high speeds before the loss. The vehicle was travelling at 186 km/h in a 100 km/h zone just two seconds before the crash was detected by the tracking device. The road was straight and the accident occurred in the early hours of the morning.

Considering all the factors and circumstances, OSTI found that the probabilities favoured the conclusion that there was an irresistible inference that the insured foresaw the loss of control over the vehicle as a consequence of travelling at a speed that was almost double the prescribed speed limit.

From the insured’s persistence in continuing to drive at an excessive speed, the logical inference was that he reconciled himself with that consequence. From these inferences, it followed that the insured acted recklessly.

The tracking report showed that the vehicle was travelling more than 40 km/h above the speed limit at the time of the collision. In terms of the policy, the insurer was entitled to decline liability
for over-speeding.

OSTI upheld the insurer’s rejection of the claim

Also view:

Car Insurance and Safety on the Road

Truck Insurance and Goods-In-Transit Insurance