The South African Insurance Association (SAIA) has received a number of enquiries from motorists about how insurers will treat motor vehicle claims where the insured person’s driver’s licence has expired after 31 August 2021.
The validity of licences that expired between 26 March and 31 December 2020 was extended until 31 August 2021 to assist those motorists in renewing their licences when they could not do so during the lockdowns of 2020.
However, the rush to renew licences over the last few weeks has led to panic, delays, and a major backlog.
Despite the concerns around out-of-date licences, SAIA said that an insurer will not automatically reject a claim where a licence has expired.
“Insurers follow the guidance provided by the Ombudsman for Short-term Insurance (OSTI) who has from as far back as May 2007 ruled that insurers should not refuse to entertain the claim if the driver’s licence or licence disc has expired.
“To determine an equitable outcome, the insurer would need to demonstrate prejudice because of the failure to be in possession of a valid licence, therefore materiality is a critical factor for consideration.”
The OSTI said that insurers should consider the full merits of each claim before making a decision and not reject claims solely because a driver’s license had expired.
“Therefore, as each individual claim is judged according to its own merits, in some cases, after examining the particulars of a claim, an insurer may determine that not having a valid licence was material and therefore directly relevant to the claim. In such a case, a claim might be denied.
“SAIA advises the policyholder to proactively contact their respective insurer or broker to make them aware of difficulties being experienced in getting a licence renewed, as well as provide evidence that the renewal application has been made or at least that attempts have been made in this regard. Insurers would make the necessary concession(s) for valid claims in consideration of this.”