Onus to substantiate rejection of a claim

Most vehicle insurance policies contain exclusions, which entitle insurers to decline liability where an incident driver is driving whilst under the influence of alcohol, or where an incident driver’s blood alcohol level is over the legal limit, or where an incident driver fails a breathalyser test.

When relying on any one of the above policy exclusions to reject a claim, the insurer bears the burden of proving the exclusion.

We now turn to consider two case studies from the Ombudsman for Short Term Insurance’s (OSTI) briefcase, which we thought would be interesting for our readers.

Case study 1: Mr S v Insurer

Mr S was involved in a motor vehicle accident. He reported that he was travelling on the N3 South and was on his way home from meeting with a seller. Mr S advised that, as he was changing lanes, another vehicle in front of him also changed lanes. Mr S then returned to the original lane and was then rear-ended by another vehicle, after which he lost control of his vehicle. Multiple vehicles were involved in the collision.

During claim submission, Mr S stated that he did not consume alcohol prior to the accident. In this particular case Mr S could not be tested via a breathalyser due to COVID-19 related regulations.

The insurer declined liability for the claim on the basis that Mr S failed to provide true and complete information in relation to the events surrounding the incident. The insurer further submitted that Mr S was driving under the influence of alcohol and failed to take the necessary steps to minimise or prevent the loss.

The insurer appointed an assessor to validate the claim. The assessor interviewed four witnesses. Two of the witnesses (witness 1 and 2) confirmed that they saw Mr S throwing out alcohol bottles into the veld at the scene of the accident. Witness 1 said that, when he spoke to Mr S, he could smell alcohol and he was drunk. Witness 2 said that she could smell alcohol on Mr S’s breath and he and the passengers in his vehicle were drunk. There were two further witnesses interviewed by the assessor. Witness 3 advised that he could see that Mr S was drunk but did not get close enough to smell the alcohol on him. Witness 4 did not speak to Mr S but had heard people at the scene saying that they could smell alcohol on Mr S’s breath.

OSTI found that the circumstantial evidence provided by the insurer was sufficient to deduce that Mr S was, on a balance of probabilities, under the influence of alcohol at the time of the accident.

In determining whether Mr S’s intoxication was material to the loss/accident, OSTI considered the manner in which the accident occurred. The insurer also appointed an expert who established that Mr S was travelling at a speed of no less than 190km/h in a 120km/h zone. It was OSTI’s view that the insured vehicle travelled at an excessive speed which was inappropriate for the prevailing circumstances and probably contributed to the loss and the extent of the damage to the vehicle.

The consumption of alcohol was therefore found to have contributed to the accident. OSTI upheld the insurer’s rejection of the claim.

Case Study 2: Mr Y v Insurer

Mr Y, the incident driver, reported that he stopped at a stop street, and then accelerated into the intersection after checking that it was safe to proceed. A black vehicle driven by Mr. X, collided with the rear door of Mr Y’s red vehicle.

The insurer relied on the provision in the policy contract to substantiate its rejection.

The insurer’s assessor interviewed three witnesses, being two police officers who had attended the accident scene and a passenger in Mr X’s vehicle. The passenger stated that after the accident, she and Mr X went to check on the driver of the red vehicle. As they approached the insured vehicle, Mr Y started fighting with them and seemed intoxicated. The passenger stated that there was no alcohol in Mr Y’s vehicle, however, Mr Y reeked of alcohol.

The first police officer stated that Mr Y did not smell of alcohol, but Mr Y’s demeanor demonstrated that he was tipsy, his eyes were red, and he was rude and arrogant. A breathalyser test could not be conducted due to the Covid-19 regulations. The second police officer stated that Mr Y was not sober. The police officer said that Mr Y was very arrogant, however, he was not sure if this was Mr Y’s normal demeanour. The police officer stated that Mr Y was not unsteady on his feet, but Mr Y was slightly moving backwards and forwards. The police officer further stated that it would be incorrect to draw one’s own conclusion about Mr Y’s body movements because Mr Y could have been cold or in a state of shock.

The insurer argued that Mr Y was under the influence of alcohol because he was aggressive, acted drunk, smelled of alcohol and looked tipsy. The insurer also argued that Mr Y did not stop at the stop street, thus, the alleged alcohol consumption had affected his driving ability.

Mr Y disputed that he was under the influence of alcohol. He stated that he was a paramedic and had to work long hours during the pandemic. Mr Y submitted that the accident may have happened due to fatigue. Mr Y also stated that during the accident, his head hit the steering wheel or window, thereby, disorientating him. Mr Y provided OSTI with an affidavit from the third party’s passenger. The passenger stated in her affidavit that the information she provided to the insurer’s assessor was false. The passenger explained that she was not in close proximity to Mr Y, thus, she could not have smelled Mr Y. The passenger stated that she provided false information because she was under the impression that the insurer was going to pay for her medical expenses. Mr Y also provided OSTI with an affidavit from Mr X. Mr X confirmed that the evidence provided to the assessor by his passenger was incorrect and false. Mr X explained that the passenger was sitting in the vehicle because her arm and leg were hurt. Mr X also stated that Mr Y did not smell of alcohol.

OSTI found that there was no evidence that Mr Y consumed any alcohol before the accident. On reviewing the assessment recordings, it was revealed that the assessor repeatedly asked both police officers leading questions that were entangled with presupposed and suggestive answers. OSTI noted that the assessor did not pose any questions to the police officers about Mr Y’s head injury or considered whether this could have affected his demeanour. OSTI also noted that the passenger admitted that her initial statements to the insurer were false. In the assessment conversation, the passenger was also repeatedly asked leading questions by the assessor.

OSTI concluded that the insurer had not discharged its onus to substantiate its rejection of the claim. Accordingly, OSTI recommended that the insurer settle the claim.

The distinction between the two cases

In both matters, OSTI had to consider the specific facts and evidence presented by the parties. In the case of Mr S, the witnesses saw Mr S throwing away bottles of alcohol. Two of the witnesses got close to Mr S and were able to detect a smell of alcohol on his breath. In Mr Y’s matter, the witnesses did not smell alcohol on Mr Y’s breath. The police officers that attended the accident scene were close enough to Mr Y and they could not smell any alcohol on Mr Y’s breath. Furthermore, the evidence did not prove that Mr Y was under the influence of alcohol.

Writer’s thoughts:
Thousands of motorists blatantly flout the law by driving under the influence of alcohol each year. Do you believe drunk driving is one of the biggest reasons for claims? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].