Warning: Insurers may turn down late claims

16 March 2005 Gerhard Genis

The reason why insurance policies require prompt notification of a claim is to enable insurers to investigate the cause and consequences of an insured event and to allow the insurer to assist the insured taking steps to prevent further damage or l

Gerhard Genis, Head of Claim Administration Services at Santam says, "We strongly advise people to claim as quickly as possible so we can indemnify them at a time when they most need assistance." 

"Quick notification is also a condition of most policies meaning that if the condition is breached, the insurer is not liable to pay the claim. It also helps insurers to reserve the correct amount of money for claims payment and to ensure that proper cash flow management for speedy claims settlement."

Genis says that claim notification periods vary; some policies require claims to be notified within a specific period of time - usually 30 days - while others require the claim to be notified as soon as possible.

"The nature and circumstances of the loss or damage are vital in determining whether a claim was reported within the time prescribed by the policy."

"Of course, we do our best not to reject claims on technicalities as we see the relationship with our clients as a long term one.  But many insurers do reject claims on these grounds especially if it is clients who hop around in search of the lowest premiums. It proves that you shouldn’t buy insurance just on price alone."

Genis notes that if a claim is notified after 30 days, such a claim will not be repudiated summarily.

"We will always request from our client the reasons why the claim was not reported to us within time. If our client cannot give satisfactory reasons, only then the claim may be declined for breach of policy conditions, especially in those cases where Santam’s rights were prejudiced by the late notification."

"The law regards timely notification of a claim as a compulsory requirement. The insurer can therefore reject the claim due to late notification, even if the policy does not contain a clause authorising the insurer to reject the claim or if the claim is one day late. Though Santam does not only rely on these as the application of the law is not consequent."

Genis says that some policy conditions require that if any event occurs that could give rise to a claim, the insured must inform the insurer of it as soon as possible.  ‘As soon as possible’ contains an element of urgency. The appropriate notification time is not when one became aware of the event, but when a reasonable person should have become aware of it.

"The definition of a reasonable notification period will depend on the circumstances of the individual claim. Unfortunately lack of knowledge can not be taken as an excuse but we aim at being as client centric as possible so obviously if there is a valid reason for a late claim, that can be proven, then the claim will be accepted," says Genis.


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