Learn From These Short Term Insurance Claims: The Citizen



Consumers can learn from the short-term insurance claims contained in the Ombud for Short Term Insurance (OSTI) latest annual report, such as how important it is to specifically insure your home appliances against power surges, how to claim compensation after a theft. with burglary and why it is important to keep your car in the event of an insurance claim.

READ ALSO: Pushing the load away can destroy your appliances – here’s how to avoid it

Current overloads and load shedding

One consumer complained that his insurer rejected a request to replace his TV after it was damaged by a surge in tension because his policy did not provide coverage for this type of damage. The insurer referred to the terms and conditions of the policy which only provided coverage for certain “insured events”, which did not include power surges.

The consumer then resubmitted the complaint and explained that he had used the wrong cause of damage as the television had been damaged by lightning. He also provided a report from his service provider that confirmed the lawsuit was lightning, but the insurer did not reevaluate his claim.

The insurer said the consumer initially registered the claim for damages to his television due to a power surge and not a lightning strike. The insurer reviewed the claim at the time of the new submission. The consumer then claimed that the report provided by the South African Weather Service was not accurate and could not be used to disclaim liability.

He wanted his claim paid because his service provider confirmed that the damage was the result of an insured event. After the investigation, the Ombudsman’s Office found that the damage report was dated after the consumer had resubmitted his claim and also did not state the reasons for the termination of the service provider.

The weather report could not be ignored and provided the insurer with proof that, on a probability balance, the damage could not have been due to lightning as there was no lightning activity during the day.

Ombud explained that the policy upon which the consumer relied is a risk-based policy, which means that the policyholder has the burden of proving on a probability balance that an insured event, as listed in the policy, such as is the proximate cause of the damage.

Due to the inconsistencies relating to the cause of the damage and the lack of information on the complaint from the insured’s service provider, OSTI could not accept the complaint.

In another case, a consumer had a dispute with his insurer who claimed his stove and refrigerator stopped working and provided a report from his service provider stating that the main PC board was faulty. He provided replacement values ​​for the damaged items, but this service provider’s report also did not specify the cause of the damage.

When asked, the service provider said that the damage to the refrigerator’s main printed circuit board was likely caused by a high voltage or power fluctuation caused by shedding the load that had caused the motor to burn. No photographs were included in the report.

The insurer commissioned an expert to verify the cause of the damage, but the consumer had already discarded the refrigerator. The insurer claimed that they could not verify the cause of the damage but agreed to pay the replacement value of the appliances and deducted an amount of R999.00 for the salvage value and agreed to waive the R1,500 overvoltage .00.

The insurer argued that he had the right to take possession of the refrigerator by way of rescue and that the policyholder left the refrigerator damaged. The consumer therefore contested the settlement offer. The ombudsman agreed with the insurer and the claim was paid.

When an insurer compensates an insured for damaged items, he has the right to take possession of the rescue. He also has the right to assess the damaged object. The insurer based the settlement offer on the replacement value presented by the insured’s service provider.

OSTI considered that the insurer would have had the right to reject the refrigerator damage claim as it was unable to assess the damage. It was fair and reasonable to make a transaction offer, minus the recovery value.

READ ALSO: The insurance ombudsman returned Rand 400 million to consumers and handled 18,000 complaints

When a theft occurs without a trace

A consumer complained after a burglary in his home garage. The claim was validated and approved, and the insurer offered the consumer a compensation amount of R10,000 on the grounds that there was no sign of forced entry or exit from the garage.

The consumer was not satisfied with the amount and turned to OSTI. He disagreed that there were no signs of forced entry or exit from the annex. He said the outdoor security cameras were broken and the electric gate was forced to open.

An appraiser was appointed and reported that the consumer was awakened by the house alarm. She turned it off and checked out to see if anyone was on the property. Since there were no signs of forced entry, he reactivated the alarm.

The next morning, the consumer discovered that several items had been stolen from the garage, but the commissioner found that the side door was not locked at the time of the accident and there were no signs of forcing or violent entry. However, the thief broke a beam at the entrance gate before climbing over.

The insurer has relied on the policy provisions that the compensation following forced entry or exit will be up to the sum insured for the theft in the event of clear signs of forced entry or exit and that the theft without forcing from your outbuildings is covered up to R10.000.

OSTI ruled in favor of the insurer because the consumer did not provide any evidence to prove the existence of a forced entry or exit from the annex.

READ ALSO: Carpooling can save fuel, but read this first

That weird noise in your car

A consumer complained that his car’s engine was damaged when the timing chain and tensioner failed after maintenance. He told the dealer that a noise was coming from the engine when he started it.

Her husband picked up his car after the service and when asked about the noise, he was told that the car was okay and suitable to drive. No additional repairs were made. Two days later, the vehicle did not start and, after inspection, the dealer informed the consumer that the engine was damaged and needed to be replaced.

He filed a complaint with his insurer, who rejected it and contested the denial, saying the dealer did not provide them with a quote for replacing the timing chain and tensioner. She also stated that her husband had not been informed of the need to replace parts to avoid engine damage.

An expert was appointed to assess the cause and extent of the damage and reported that the valves in the engine had bent when the timing chain failed. He claimed the timing chain was gouged and the tensioner broke into two pieces. The plastic timing chain guides were worn to the point that the timing chain touched the steel on the sides. This was proof that the vehicle has been driven in this state for a period of time.

According to the technician, she told the consumer’s husband that the timing chain and tensioner needed to be replaced and showed the commissioner the quote. The insurer said the noise in the engine could not have gone away after the service, as the timing chain and tensioner had not been replaced.

OSTI found that the insurer had determined that the timing chain and tensioner were worn prior to the engine failure. The consumer did not keep the car in good repair by not carrying out preventive maintenance to protect it from further damage.

READ ALSO: What to expect from short-term insurers after the KZN floods

Claim your short-term insurance

Call OSTI on 0860 726 890 or visit the website at https://osti.co.za/.