Ombudsman for Short-Term: Increase in rejection of claims

The Ombudsman for Short-Term Insurance sees an increase in rejection of claims due to policy conditions not being adhered to in terms of consumers alarm systems.

The Ombudsman for Short-Term Insurance says that its offices have seen an increase in complaints received from consumers where their claim has been rejected due to them not adhering to their policy conditions in regard to the operation of alarm systems.

Complaints arereceived concerning instances where liability for a claim is denied on the grounds that no signal was received by the alarm monitoring service at the time the burglary took place. “Our office has seen an increase in complaints received from consumers where their claim has been rejected due to their alarm system not being armed at the time of the incident”, says Brian Martin, Ombudsman for Short-Term Insurance. There are many contributing factors, which cannot guarantee a 100% foolproof alarm system, such as power failures, a poor signal or no signal received, faulty batteries, faulty phone lines or no response by the alarm company. Alarm companies will not take responsibility for these factors and this needs to be kept in mind by consumers when they shop around for insurance.

The office of the Ombudsman applies the law and equity in its determinations and depending on the facts of each case, might be able to come to the assistance of consumers.

In particular, difficulty has been experienced by consumers in complying with the requirement that the alarm system be activated whenever the premises are left unattended. This requirement has often led to unintended consequences and has proved to be unworkable, impractical and at times very harsh in its effect, particularly where members of the Insured’s family or employees have been responsible for not activating the alarm system, or are incapable of so doing. Some policies also stipulate that the premises will be treated as unoccupied if only the housekeeper’s rooms are occupied.

Consumers should rather see the installation of an alarm system as a personal security measure and not as a means to securing a discount on insurance premium. “We are not saying that consumers should not install alarm systems in their homes and businesses, but they should know what they are signing for when they take out an insurance policy. They should check the clauses in their policy pertaining to the requirements of the alarm system and make sure that they are not too onerous or impossible to comply with. The cheapest policy is not necessarily always the best policy”, says Brian. Consumers need to look at their own lifestyle and find an insurance policy that best matches it.