Moonstone: Driver loses claim for not reporting previous accidents

The Mercury reports that Sherwin Jerrier is R600 000 out of pocket after a judge ruled that Outsurance did not have to pay his claim after a car accident. He apparently omitted to inform them about two previous accidents for which he had chosen not to lod

A lawyer said the case of Jerrier vs Outsurance, in which KZN High Court (Pietermaritzburg) Judge Piet Koen ruled recently, has ramifications for everyone with car insurance. ‘It means that any insured person now has the obligation to inform their insurance company of every little incident, no matter how trivial – such as a supermarket trolley ding – even if they do not wish to claim. This is so the company can assess their risk,’ a lawyer reportedly told the paper. According to the report, the judge noted that while neither of the two previous accidents was reported, Jerrier had, of his own volition, referred to them when interviewed by the insurance company’s investigator after he claimed for the most recent accident. However, he said, in terms of the wording of the policy, they should have been reported. ‘Both (previous) incidents would cause a reasonable man to conclude that knowledge of them would indicate a change in Jerrier’s circumstances, at the very least from a claims history perspective, but also as a moral risk that may influence whether the company would give him cover, the conditions and the premiums,’ the judge said, absolving the company from liability.

In my view, this story is slightly slanted by both the media and the lawyer for their purposes. One of our compliance officers, who read through the actual court case, remarked that there could have been a stronger case for the claimant.

I cannot fathom why the plaintiff did not argue that this was a material term that should have been disclosed to him. With no intermediary involved, there was a duty on the insurer to do this in terms of the Consumer Protection Act.

Which raises another question – what would the outcome have been had this complaint been laid elsewhere?

He could have gone to the Short-term Ombud, in which case I suspect he would have lost too, but had he gone to the FAIS Ombud, and claimed under the FAIS Act, he would possibly have stood a better chance.

Having taken a shot via the formal legal system, and missed, he has also burnt his bridges in respect of the other options.