Insurance Claims

Thousands of South Africans are insured by insurers like Santam, Outsurance, Regent and other insurance companies. Insurance is an agreement with an insurer to pay a monthly or yearly payment (premium) in return for which the insurer will pay for damage or loss to the items and people insured. All sorts of things can be insured, such as:

  • Property
  • Vehicles, boats, aircraft etc.
  • Personal belongings.
  • Indemnity against claims by others for damage caused by insured or representatives.
  • The issue of insurance is relevant not only to the person who is insured and suffers a loss, but also to someone who has suffered harm or loss due to the wrongful act of someone who is insured.

The person who is harmed by the insured has the right, depending on the cause of harm, to claim from that insured and whilst most ordinary citizens might be unable to pay compensation for the damage, the insurer will, depending on the limit of indemnity, be able to cover most, if not all of the loss.

The most common form of indemnity claim is the vehicle damage resulting from motor vehicle accidents. Most claims result from motor vehicle damage and involve insurers either claiming or defending damages claims.

If your vehicle has been damaged in an accident where the other driver was entirely to blame and that other driver was insured, you will be able to recover your damages from the other driver’s insurer. Many people lose their “no-claims-bonus” and will pay excesses on their own claims – this can be avoided if one is able to get a quick settlement from the other insurer. If on the other, the other driver is not insured, you should claim directly from your insurer who is obligated to pay your damages.

If you caused the accident, then your insurer is obliged to pay the other party’s damage – you may be required to pay an excess payment on this claim. If, on the other hand, you receive a claim (letter of demand or summons) you should immediately refer the claim to your insurer.

Claims against Insurers – Repudiation
Insurers may refuse to pay claims for a variety of reasons. As all insurance is an agreement (contract) between you and your insurer, the insurer will always rely on the insurance agreement, which is contained in:

    1. The Schedule of insurance, read together with
    2. The Policy

The Schedule details the specific items and amounts insured and exclusions and preconditions, it may also include the statements you have made as a basis on which the insurer has entered into the agreement.

The Policy details the general conditions items insured under most contracts, procedures and all of the other relevant terms of your agreement.


Some reasons that your insurer may offer when repudiating (refusing payment) your claim are:
i) False statements made when applying for your insurance;
ii) Failure to disclose relevant facts when applying for insurance;
iii) Your claim does not fall within the items insured under the policy;
iv) You have failed to comply with the terms of the agreement;
v) Fraud;
vi) You have delayed for too long the reporting of the incident which may lead to a claim;
vii) Failure to pay your premium on time/at all;
viii) Your contract does not include consequential loss;
This list is not all-inclusive, but designed to cover the most commonly occurring reasons.

False statements made when applying for your insurance
When you apply for insurance, whether it be over the phone (Outsurance, Miway, Dial Direct, Auto & General) or face to face, you will be asked a number of questions. If you answer any of the questions wrongly, in other words if you are not entirely honest, and your “misstatement” is discovered, the insurer may be entitled to repudiate. If your circumstances have changed since answering the questions, it is extremely important that you notify the insurer of the changed circumstances.

Example: Your insurer will ask who normally drives the vehicle and you may answer only yourself. A year later your daughter may enter university and begin driving the vehicle on a daily basis. She has now become a regular driver – this becomes relevant to the risk and you must notify the insurer.

Failure to disclose relevant facts when applying for insurance
It is imperative when you apply for insurance that you include all relevant information, no matter how insignificant you think the details are as they may have an influence on either the decision whether to insure you, or the amount of your premium.

Example: You are applying for disability insurance and have a history of getting migraines for a brief period a number of years previously. Your insurer may conclude that the migraines may be indicative of a bigger problem, or may result in you becoming temporarily or permanently disabled, both of which will affect the risk (whether to insure you or not) and the premium (they may choose to insure you but opt to load the premium for the migraines). The insurer may also opt to insure you for every possibility excluding disability due to head injury related to the migraines.  In other words … if it may be relevant – disclose it.

Your claim does not fall within the items insured under the policy
A favorite of many insurers is the "terms of use" clause; your vehicle is insured for personal use only (including driving to work and back) and one day your boss asks you to run an errand for him. When you complete the claim form and declare that you were on an errand for your boss, your insurer may elect to repudiate on the grounds that the vehicle was used for business purposes (for which it was not insured.) This is an extreme example, but is intended to make you aware that your agreement with your insured is based on risk, and requires the “utmost good faith.” The insurer is entitled to insist that you comply with the terms of the policy.

You have failed to comply with the terms of the agreement
Read your agreement carefully – and make sure that you don’t do anything to jeopardise your cover.
Example: Your vehicle policy will undoubtedly have a term that excludes liability on the part of your insurer if you fail to keep your vehicle in a roadworthy condition. Should you have a collision while one of your tyres is too smooth, your insurer may elect to repudiate on that ground.

If you lie in an effort to get the insurer to pay for something they aren’t obliged to, you don’t deserve to be compensated. Apart from facing some time behind bars, don’t even think about instituting action against the insurer.

You have delayed for too long the reporting of the incident which may lead to a claim
You are required by most insurers to notify them within a reasonable period of time of any incident which may give rise to a claim.
What constitutes a “reasonable period of time” will differ from case to case. A person who is hospitalised for two months is hardly able to inform his insurer of a possible claim, whereas the employer of someone who has destroyed the property of another is immediately in a position to inform his insurer (he should do so within two weeks).

Failure to pay your premium on time/at all
The agreement with your insurer will undoubtedly state that the fact that the insurer will pass a debit order on your account every month does not shift the onus of ensuring payment onto them. The effect of this is that if for any reason whatsoever, including bank error, insufficient funds on the day of debit orders etc. the onus is on you to ensure that your premiums are paid every month. Your policy does not include consequential loss.

Consequential Loss
Most ordinary short term personal policies exclude consequential loss of the insured. The effect is that the damage is covered, but not the loss that results as a consequence of the damage.

Your car is written off in an accident. As a result you are unable to earn an income due to lost deliveries. The lost deliveries are consequential to the damage and are not recoverable.
Note: It is possible to insure yourself or your business against consequential loss. Your insurer or broker will advise you.

My Insurer refuses to pay my claim – What do I do?
Once your insurer has refused to pay your claim, you should immediately have a careful look at your insurance policy (this is not the schedule which contains the specific items and amounts of your insurance; it is a policy or agreement which contains terms and events and risks insured.) This will help in assessing your rights and will also help when you seek legal advice.

If your insurer has formally repudiated your claim in writing, you have limited time within which to act – ACT FAST.

You may elect to (within the short period allowed):
1. Refer your dispute to the ombudsman for:
            i. Short term insurance – property damage, loss etc.
            ii. Long term insurance – disability, life etc.
2. Seek legal advice.
3. Immediately institute action (By issuing and serving a summons within the period stated in your policy).

(If you have timorously referred your dispute to the ombudsman, the period for instituting action is stopped. In other words, during the period that the ombudsman considers your complaint, your right to claim will not fall away. The moment that the ombudsman makes a final finding, you are on the clock again. Make sure that you get the right advice in good time.)

Contact Details

Phone Phone: (012) 809 1588
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Address: Block 2, Lombardy Business Park,
Cnr Cole & Graham Rds, Lombardy , Pretoria