Insurers making increasing use of ‘reckless driving’ clause to reject claims

Insurers are disputing or rejecting an increasing number of motor vehicle accident claims on the grounds that the insured was speeding, and consumers should be made aware of the implications of the reasonable precautions clause in their policies, the Ombudsman for Short-term Insurance (Osti) says.

The clause requires that the insured must use all reasonable care and take reasonable precautions to prevent or minimise loss, damage, death, injury or liability.

Senior assistant ombudsman Ayanda Mazwi said a report of complaint trends conducted by the Osti in November last year showed that insurers were rejecting an increasing number of motor vehicle accident claims based on the insured’s breach of a contractual duty of care.

Mazwi said insurers mainly invoked the reasonable precautions clause where they allege that the insured was driving above the regulated speed.

Osti’s approach to these disputes

When deciding a dispute of this nature, the Osti will first consider whether the insured was, in fact, speeding.

The insurer, as it is relying on a breach by the insured of a policy condition or on an exclusion, carries the burden of proving the breach or exclusion. It can rely on evidence such as data downloaded from the vehicle’s on-board computer vehicle tracking reports and experts in accident reconstruction. The Osti will consider the reliability of this evidence before the matter can be decided.

If it is established that the insured was speeding, the Osti will consider the legal principles applicable to the reasonable precautions clause.

An insurance policy may not, by default, exclude liability because the insured was negligent. The legal position is that the insurer must prove that the insured acted recklessly. In this context, speeding on its own does not necessarily mean that the insured was reckless. Rather, recklessness presupposes foreseeability on the part of the insured.

The insurer must put forward a convincing argument on which to conclude that the driver foresaw the possibility of an accident and deliberately courted the danger by taking measures which the driver knew were inadequate.

Alternatively, the driver simply did not care that the measures were inadequate and therefore recklessly reconciled himself or herself with the danger.

It is unlikely that a driver will admit recklessness. Therefore, it may be determined by inferential reasoning based on the facts of the case.

Two case studies

In a recent case, the Osti ordered an insurer to pay a claim after it found that the conclusions put forward by an accident reconstruction expert were not based on accurate facts.

The ombudsman’s office found that the expert did not consider objective evidence at the accident scene, and there were substantial inconsistencies in the measurements that he had used to calculate the speed.

In another case, the insured contested the calculation of speed by the insurer’s expert but asked the ombudsman to decide on the issue of recklessness. The Osti analysed the incident description and the conditions under which the insured was driving.

In his defence, the insured said that he was not familiar with the road; that visibility was poor because it was night-time; and the streetlights were not working. Photographs of the accident scene showed that the insured was driving in a built-up area towards a T-junction.

The insured said that he had not seen the intersection ahead. When another vehicle suddenly approached from his left-hand side, he took evasive action which caused him to lose control and hit a tree.

The Osti found that, based on these observations alone, the insured should have exercised caution by regulating his speed to improve visibility and should have kept a proper lookout for obstacles on the road.

In addition, the speed limit road sign (60km/h) was prominently placed some distance before the intersection. The insurer’s accident reconstruction expert calculated that the insured was travelling at 104km/h at the time of the accident.

The Osti concluded that, if the expert’s calculation of the speed was correct, the insured’s conduct would be considered reckless.

As a matter of probability, the insured’s conduct was also found to be the cause of the accident, because if he had kept to the speed limit, he would have been in a better position to see the intersection, stop and safely execute the turn. For these reasons, the Osti found in favour of the insurer.

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