Data from the Ombudsman for Short-Term Insurance (OSTI) shows that an increasing number of motor vehicle accident insurance claims are being rejected and disputed on the basis of the ‘reasonable precautions’ clause in insurance policies.
In fact, the OSTI recently found in favour of an insurer, where an expert calculated that the insured drove above the regulated speed, said George Herbst, senior associate at Barnard Attorneys.
“The OSTI justified its decision by stating that the insured was reckless because had he observed the speed limit, he would have been in a better position to assess the road condition.
“The OSTI correctly remarks that the insured has a duty to not act in a reckless manner and that the test for recklessness is largely a subjective test. Thus, the onus remains on the insurer to prove that recklessness, and to acquit itself of this onus, it may rely on objective evidence.”
The recent and increasing reliance by insurers on digital downloads of data from motor vehicles to validate claims is useful in many circumstances, but insurers must be cautioned to be circumspect about solely relying on this data to reject claims based on the reckless behaviour of an insured driver, said Herbst.
“Firstly, the insurer must ensure that the person who downloads and interprets the data is a bona fide expert and that the data extraction and methodology of arriving at conclusions about the driving behaviour of the insured, is credible and verifiable.
“It is not generally sufficient for an insurer to rely only on data from the vehicle if no cognisance is taken of the physical scene, the prevailing traffic conditions, the time of the accident and other physical factors. Also, the level of experience and typical driving behaviour of the insured are factors that should be considered.”
A growing issue being encountered in claims is the fact that certain experts who download the data for the insurers, typically refuse to share with the insured, the actual data download, which prejudices the insured to analyse and use their own expert to verify and validate the information, and to comment thereon, Herbst said.
This makes it almost impossible for the insured to have a fair engagement on the issue, he said.
“The methodology stands to be tested in the South African courts, whereas in certain foreign jurisdictions, it has already been canvassed. It is always advised that those who find them in these situations consult their attorneys for assistance because the arguments about these situations are often technically and legally complex.”