Ombudsman advises insurers to settle claims of 'unlicensed' policy holders

Gari Dombo, Managing Director, Alexander Forbes Personal Services, "Is delighted that Brian Martin, Short Term Insurance Ombudsman has confirmed that a lapsed card licence will not prevent you from receiving a payout in the event of an accident."

Identity card licences have a life span of five years. Given that they were introduced over six years ago, those who first converted their licences from the old ID book variety to the new card system are up for renewal.

Since licence holders are not informed when their cards expire, many drivers continue to use the road, oblivious of the fact that the five-year-life of their licence card is over.

Add to this ongoing problems with the new eNatis licensing software, backlogs at licensing centres, and the civil servants strike.

The result is a large number of the drivers on South Africa's roads are either unaware of the need, or are simply unable, to re-new their licences.

Dombo says that, "Traditionally if a client was involved in an accident without a licence their insurance company would not be required to cover their loss."

"Given that card licenses expire after five years there has been some confusion as to whether insurers would be required to pay out in the event a policy holders' card had expired.

Dombo, quoting the Ombudsman for Short-term insurance says, "Should you fail to renew your card licence you will still be in possession of a valid licence albeit without the required proof."

So, while you may be subject to a fine for not being in possession of a valid drivers licence, any insurance claim you may lodge should not be affected as you will still be considered a licensed driver.

Dombo again quotes the Ombudsman. "Should the Ombudsman receive a complaint where an insurer has rejected a claim because the driver did not have a valid drivers licence, the Ombudsman would require the insurer to demonstrate prejudice as a result of the clients failure to be in possession of a valid licence."

Dombo is delighted that there is now clarity on this issue as he is aware of a number of insurers who have refuted claims based on expired card licences.

Dombo does, however, caution that, "Should you have failed to convert your old ID book licence to a card licence and you are involved in an accident you will effectively be unlicensed as old ID book licenses are no longer valid."