The onus of proof lies with the insurer
In failing to discharge its onus in establishing that an insured was under the influence of alcohol at the time of the accident, Old Mutual Insure has been ordered, by the Ombudsman for Short Term Insurance (OSTI), to pay a claim they initially did not want to pay.
The issue for determination in the OSTI briefcase was whether Old Mutual Insure was entitled to reject a claim for a vehicle accident based on evidence in substantiation of its rejection of the claim.
From both sides of the story, to the final outcome, the OSTI briefcase determinations make for a good read.
The incident at hand
Mr X submitted a dispute to OSTI following the rejection of his claim for a vehicle accident. The insurer (Old Mutual Insure) rejected the claim on the grounds that Mr X had been driving whilst under the influence of alcohol.
Mr X advised that a third party vehicle, travelling next to him, cut him off and he swerved to avoid the third party, thereby losing control of the vehicle and colliding with the wall of a house. Mr X conceded that he had consumed alcohol prior to the accident. He, however, indicated that he had stopped consuming alcohol at 8:30pm. The accident occurred at approximately 2am the following morning.
Old Mutual’s version
In rejecting the claim, Old Mutual Insure relied on a toxicology report which calculated Mr X’s blood alcohol concentration as 0.033grams/100ml, at the time of the accident.
Old Mutual Insure rejected the claim on the basis of its policy provisions which excluded liability where the driver was under the influence of alcohol or whilst his blood alcohol level exceeded the legal limit, which is 0.05grams/100ml.
Old Mutual Insure argued that although Mr X’s alcohol concentration, according to the toxicology report, was not over the legal limit, the claim was nevertheless rejected as Mr X was under the influence of alcohol.
In relying on circumstantial evidence, OSTI referred Old Mutual Insure to the matter of Swart versus Mutual & Federal Insurance Co. Ltd. 2009 JDR 0736 (WCC) as an example.
In the Swart versus Mutual & Federal Insurance case, the court held that the demeanour of an insured driver at the time of an accident may constitute sufficient evidence to make a prima facie finding that the insured driver was under the influence of alcohol at the time and that this was the cause of the accident.
It held further that as no blood/breathalyser tests were conducted in the Swart versus Mutual & Federal Insurance case, the insurer could rely on circumstantial evidence in substantiation of its rejection of the claim. Independent witness statements describing the insured’s demeanour, the insured’s whereabouts prior to the accident, the amount of alcohol consumed prior to the loss, the manner in which the insured drove the vehicle and the manner in which the accident took place could assist the insurer in discharging its onus.
OSTI’s final word
In the present matter the only verbal evidence relied on by Old Mutual Insure was Mr X’s version, with regard to the amount of alcohol he had consumed the day prior to the loss and the toxicology report.
The toxicology report, which corroborated Mr X’s version, did not enable Old Mutual Insure to discharge its onus as set out in the Swart case, as the toxicology report indicated that his blood alcohol level was below the legal limit. Further, Old Mutual Insure had presented no circumstantial evidence indicating that Mr X was under the influence of alcohol.
As Old Mutual Insure had failed to discharge its onus in establishing that Mr X was under the influence of alcohol at the time of the accident, OSTI recommended that the claim be settled, which Old Mutual Insure agreed to do.
Editor’s Thoughts:
Old Mutual Insure argued that although Mr X’s alcohol concentration, according to the toxicology report, was not over the legal limit, he was still under the influence of alcohol. Do you believe drunk driving is one of the biggest reasons for claims? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za.
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