Why you need to act quickly when claiming from insurance in South Africa
South Africans who wish to claim from insurance must do so within a fixed timeframe or lose the right to claim under their insurance policy.
Legal experts Raynold Tlhavani and Zimasa Ranisi at Webber Wentzel looked at a recent case before the Gauteng Division of the High Court, which reaffirmed that time-barring clauses in insurance contracts are enforceable.
Time-bar clauses are common for insurance contracts. They mean that the insured must institute action against the insurer within a specified timeframe or lose their right to claim under the insurance policy.
Despite the clauses being common, insured parties often fail to comply with the clause.
If they do not comply, the insured must show a valid reason for non-compliance and that it does not violate public policy.
According to Webber Wentzel, in reviewed case, the insured lodged a claim for indemnity following a motor vehicle accident.
The claim was rejected for various reasons, including the insured’s failure to institute action against the insurer within the policy’s time period. When the insured tried to institute action against the insurer, the insurer used the time-bar clause as a defence.
The insured failed to file an explanation for his failure to comply with the clause.
During the trial, the insured tried to explain the reason for his non-compliance with the time-bar clause, which included him blaming his attorneys and claiming that he was in settlement negotiations with the insurer – which he could not prove.
Although he won in court, the judgement was later reversed on appeal.
The full bench found that the parties were tied to their pleaded cases, and even if this was not the case (the insured could not introduce new arguments during the trial), he did not explain his non-compliance.
Ultimately, the appeal was upheld with costs.
Read the fine print
Legal expert Jean-Paul Rudd from Adams&Adams said that South Africans must read the fine print when entering into contracts with insurance companies.
Rudd looked at a case where a driver hit a curb, lost control of his car, and hit a pole. His insurer rejected his claim for breaching the insurance contract, which required the driver to take all reasonable precautions while driving.
The insured took the matter to the Ombudsman for Short-term Insurance, but the insurer was still seen as being in the right, and the driver did not receive a payout.
This was due to the ‘reasonable precautions clause’, which states that parties must take appropriate measures to prevent foreseeable damage. This clause intends to hold all parties accountable for avoiding potential harm and damages.
Rudd said that insurance contracts are binding agreements between the parties, and failure to comply with the obligations can result in claim rejections.
“It, therefore, pays to read and understand the fine print of an insurance contract,” Rudd said.
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