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From the short-term Ombud

02 June 2006 Helm van Zijl

1. VALIDITY OF DRIVERS LICENCE ISSUED IN ZIMBABWE

The Insureds vehicle was damaged beyond economical repair in a collision that occurred on the N1.His claim was rejected on the ground that, although he was a South African citizen, he did not have a valid South African drivers licence.

The Ombudsman pointed out to the Insurer that the Insured did have a Zimbabwean drivers licence, where he had been a permanent resident.  He obtained an international driving permit from the Automobile Association, which was valid at the time of the collision.  The Ombudsman, in the meantime, required the Insured to convert his Zimbabwean drivers licence to a South African drivers licence.  As soon as confirmation of this was obtained, the Insurer admitted the claim.


2. USE OF VEHICLE AT THE TIME OF LOSS IS RELEVANT

Whilst the Insured and her husband were visiting a house which a friend wished to rent, the Insureds Nissan 1400 Champ was stolen.  The Insurer rejected the Insureds claim on the ground that the Insured had conceded that the vehicle had previously been utilised to transport stock for their business.  The business closed down and her husband utilised the vehicle for odd jobs he received as a plumber.  The Insurer stated that had it known about the fact that the vehicle was utilised for business, it would have insisted on a tracking device, which is its minimum requirement for business use.

The Ombudsman pointed out to the Insurer that at the time of the loss, the vehicle was being used for social, domestic and pleasure purposes.  The Insurer was persuaded to meet the claim.


3. PROPERTY STOLEN FROM AN UNATTENDED MOTOR VEHICLE

On the 31 March 2005, a small window of the Insureds motor vehicle was smashed.  The Insureds vehicle was parked at the back of the house behind locked gates.  Her cell phone and wallet, which were in cubby-hole of her vehicle, were stolen, together with the radio/CD player and one CD.  The claim for the radio/CD player was met, but the claim in respect of the cell phone was rejected on the ground that it was stolen from an unoccupied vehicle.

The policy provided cover for the radio/CD player but excluded other property left in an unattended motor vehicle.  The Ombudsman concurred with the decision of the Insurer that the claim was correctly rejected.


4. ALL RISKS INSURANCE LOSS OF OR DAMAGE TO INSUREDS PROPERTY

The Insureds granddaughter attended a graduation party and she put a cell phone, which the Insured bought for her, into a friends bag for safe-keeping.  The following day she wanted to use her cell phone and when she contacted the friend, she was informed that the friends money, as well as the cell phone had been stolen from her bag.  The Insurer rejected the claim on the basis that the granddaughter had been careless.
 
The Ombudsman asked the Insurer what cover was granted by the policy as, generally, the all risks type of cover applies to loss of, or damage to, the Insured property.  The fact that the cell phone was placed in a bag did not fall outside the scope of the cover.  The Insurer agreed with the points made and settled the claim.


5. NON-DISCLOSURE / MATERIALITY

The Insureds 2000 Volkswagen Beetle was hijacked on 18 November 2003.  The Insurer rejected the claim on 29 January 2004 on the ground that the vehicle was performance upgraded and this fact was not disclosed to the Insurer. During September 2005, 18 months later, the Insured approached the Ombudsmans Office.

The Ombudsman pointed out to the Insurer that the insured vehicle was a 2000 Volkswagen Beetle 2.0 Highline.  It was insured for R185 000 and common sense dictates that the underwriter should have been aware of the performance/modification to the engine.  Furthermore, the upgrading of the engine was not material to the hijacking of the vehicle.  The Insurer also agreed that in the circumstances to raise time-barring would be inappropriate.  The claim was admitted.


6. ALL RISKS THEFT OF PROPERTY FROM AN UNLOCKED VEHICLE

The Insured was on his way to work when he had a flat tyre.  Because he was only three blocks away from a tyre, wheel and replacement centre, he left his vehicle in the care of the centre and gave them the keys to the vehicle. He was advised that the repair process would take about 40 minutes. The Insured then left and enjoyed a breakfast.  After breakfast, he collected his vehicle, and went home to clean up.  He then found that a bow and arrow and some clothes had been stolen from the vehicle.  The Insurer rejected the claim because in terms of the All Risk exclusion, there is no cover for theft from a motor vehicle unless the vehicle was locked and there were signs that the vehicle was broken into.

The Ombudsman had no hesitation in agreeing with the Insurer that on the aforesaid facts, it was entitled to maintain its rejection of the claim.


7. ALTERNATIVE PROOF OF EXISTENCE AND CONDITION OF A VEHICLE SHOULD BE ACCEPTABLE TO INSURERS

The Insured collided with a horse at night and severely damaged his Toyota Corolla. The Insurer rejected the claim on the ground that the Insured had failed to have his vehicle inspected at a Glasfit centre or had omitted to furnish a copy of the inspection report to the Insurer.

The Ombudsman pointed out to the Insurer that the vehicle had been purchased from a reputable motor dealer, had been serviced regularly and, at the time of purchase, a roadworthy test was done.  The policy had been in force for more than a year.  The vehicle had, in fact, been serviced one day before collision.  The Ombudsman also pointed out to the Insurer that the purpose of a vehicle inspection is to prove that the vehicle exists, and that it did not suffer prior damage.

The documentation furnished to the Insurer accordingly demonstrated that the vehicle existed and was undamaged immediately prior to the loss.  The Insurer was then persuaded to meet the claim.


8. FAILURE BY INSURER TO REFUND PRO-RATA PREMIUM ON IMMEDIATE CANCELLATION
 
On 27 October 2005, the Insured telephoned the Insurer to cancel his policy.  The Insured presumed that his premium for the whole of October had been paid and that he would have cover until the end of October.  On 30 October 2005, his vehicle was damaged beyond economical repair in a collision.  The Insurer rejected the claim on the ground that the policy had been cancelled with immediate effect as from 27 October 2005.

The Ombudsman pointed out to the Insurer that the Insured presumed that the premium for the whole of October had been paid, and requested the Insurer to advise what refund of premium was made in respect of October, when it was made and what the amount thereof was.  The Insurer conceded that no refund had been made and settled the claim in full.


9. ONLY THE INSURED CAN CLAIM ON POLICY

On 22 September 2004, the Insured and her husband traded in her vehicle and purchased a new one.  Because the traded-in vehicle was the Insureds vehicle, the new vehicle was registered in her name and the insurance was also in her name,  The monthly instalments on the vehicle, as well as the debit order for the policy, were paid by her husband, who also used the vehicle.  Five months later, the Insureds marriage drastically deteriorated.  On 13 February 2005, the vehicle was extensively damaged whilst driven by the Insureds husband.  Three days later, the Insured deleted the vehicle from the policy and specifically informed the Insurer that she did not wish to submit a claim.  The Insureds husband nevertheless submitted a claim, which was rejected by the Insurer on the ground that its insured had withdrawn the claim.

The Ombudsman suggested to the Insureds husband to communicate with his ex-wife (they were divorced on 22 March 2005), but if he could not persuade her otherwise, the Insurer was correct in maintaining its rejection of his claim.

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