Modifications vs Insurance

[Truvalu]

Is there anyone out there who will please change the name of this thread to something like YOU vs INSURANCE...

maybe in the off topic lounge??

I will keep on posting case studies involving clients companies and the Ombud and help with info as far as possible. That is now if there should be a need for something like this...

 

[Truvalu]

Unlicensed vehicle is not necessarily unroadworthy

The Insured’s Land Rover was damaged beyond economical repair in an accident. The Insurer rejected the claim on the ground that the vehicle was ‘not roadworthy at the time of the loss’. The Land Rover was in fact unlicensed because the Insured had overlooked the renewal of the annual license some four months prior to the accident.

Ombudsman’s response

The Ombudsman pointed out that the Land Rover had been regularly serviced and maintained and was in excellent condition immediately prior to the loss. The Insurer agreed that whilst the rejection of the claim accords with the technical dictates of the policy wording, this was one of those instances where the nature of the rejection bears little relationship to the proximate cause of the loss. As the unlicensed status of the vehicle did not contribute to the loss in any way, the Insurer admitted the claim.

 

[moranor@axis]

you must have seen some weird claims...

 

[Twinz]

Interesting interpretations by the ombudsman and bears out my earlier view. Thx Travula for finding them.

 

[Truvalu]

Cause of damage specifically excluded situation

On Saturday afternoon the insured was travelling along Rossini Boulevard, a dual carriage way in Vanderbijlpark. Because of a heavy downpour there was water across the road. The insured, traveling in a two-year old BMW thought that the water was not deep and proceeded through it, but the water turned out to be deeper than expected and the engine eventually cut out. One of the residents of Rossini Boulevard used his Bakkie to pull the BMW out of the water. The engine was damaged, the cost of repairs amounted to R9,527.39. The insurer rejected liability on the ground that the policy exceptions, inter alia, stated - "We will not be liable for damage to the engine or tyres unless some other part of the vehicle is damaged at the same time".

Ombudsman’s response

The Ombudsman agreed with the insurer that based on the facts, there was no cover in terms of the policy.

 

[moranor@axis]

thats messed up i can see why they put it in, but...

 

[Truvalu]

What is consequential loss in terms of a Motor policy?

The Insured's almost brand new Toyota Hi-Lux (it had travelled 4,500 kills) in slippery and wet conditions fell onto its side. Passers-by pushed the vehicle back onto its wheels. Damage to the body was minimal. The Insured drove the vehicle to the nearest panel beater, which was about 15 km's away. After panel beating repairs, the vehicle was taken to Pretoria North Toyota where it was found that when the vehicle rolled on its side, oil from the sump leaked onto the piston, which resulted in excessive compression and which led to the bending of the con rods when the engine was started. The Insurer then rejected liability for the engine repairs on the ground that the Insured's negligence had caused damage to the engine.

Ombudsman’s response

The Ombudsman pointed out to the Insurer that the purpose of a Short-Term Insurance Policy is to indemnify the Insured against his own negligence. It was not unreasonable for the Insured to have assumed that after the vehicle fell over onto its side, that the vehicle had sustained no further damage. The Insured did not observe any lights on the dashboard to warn him of potential damage to the engine. The Consequential Loss Exclusion relied on by the Insurer was not applicable and is more relevant to financial losses and not to resultant damage sustained in an accident.

 

[Twinz]

Damn that is an incredible finding by the ombudsman:clap:

 

[Truvalu]

Betterment

One evening, whilst the insured was travelling along a road in Durbanville, he was confronted by an oncoming vehicle on the wrong side. In order to avoid a collision he left the road and felt that the undercarriage of his vehicle had “hit something”. He stopped and climbed out to have a look, but because it was dark could not see any damage. He re­started the vehicle and drove until approximately one kilometer from his home when the engine started making a noise and eventually cut out. Only then did the oil light come on.

The insurer initially rejected liabi­lity on the grounds that the damage was caused by consequential loss. Subsequent­ly the insurer reconsidered the insured’s claim for R40 436,20, which included engine repairs, and paid R15 708,66 and claimed that the shortfall of R24 728,04 should be deducted because of betterment, i.e. the insured had a better engine.

The Ombudsman
pointed out to the insurer that the critical question was to establish whether the market value of the vehicle had been increased by virtue of the repairs effected to the engine. The insurer had not demonstrated that this was the case. In the absence of clear evi­dence that the market value of the vehi­cle had been increased, the insurer would not be entitled to claim betterment. The insurer responded that it had spoken to three dealers, who all confirmed that the value of the vehicle had been enhanced, but they were not prepared to commit themselves to writing because they did not want their names to become ‘em­broiled in a consumer dispute’. The in­surer then conceded that it had no evidence to prove that the market value of the vehicle had been enhanced and paid the shortfall of R24 728,04.