During 2018, the Short-term Ombud (OSTI) finalised a total of 9 474 formal complaints with 48% of these related to motor vehicle insurance. The majority of these complaints considered by OSTI, at 74%, were for accidental damage.
OSTI also recorded a 15% decrease in the number of considered complaints relating to rejections on the grounds that the insured was driving under the influence of alcohol (DUI). OSTI believes that decline can be attributed to several factors:
- increased consumer awareness and responsibility on the dangers and consequences of DUI,
- measures are taken by the insurance industry (such as the ‘take me home’ service) and
- the strong approach was taken by OSTI on the insurer’s evidentiary burden when defending this rejection.
In 2018, 18% of motor vehicle insurance disputes were resolved in favour of the insured, with a recovery of R53 641 058 where the dispute related to a claim.
In one of these cases the insurer rejected a claim on the grounds that the damage to the vehicle occurred when a member of the insured’s (Ms M) household, who has authorised access to the vehicle, used the vehicle without her consent and failed to adhere to the conditions of the policy by driving whilst under the influence of alcohol.
In rejecting the claim, the insurer relied on evidence from a security guard, tow operator, two passengers as well as video footage.
While in criminal cases the state has to prove beyond a reasonable doubt that a person was indeed driving under the influence, with insurance claims, insurers don’t have to depend on the results of a blood test or breathalyser. “It is sufficient to produce circumstantial evidence to demonstrate that the driver was under the influence of alcohol … such as statements by police or emergency-service personnel at the scene of the accident, doctors or nurses who attended to a driver who was admitted to hospital, eyewitnesses who were able to observe the driver’s demeanour, witnesses who can account for the driver’s whereabouts prior to the collision and who can attest to whether he or she consumed alcohol, security or video footage from restaurants or bars,” OSTI reported in a similar case in December 2018.
As Ms M’s claim against the insurer is a civil claim, the onus on the insurer is to demonstrate on a balance of probabilities that the incident driver drove the vehicle whilst under the influence of alcohol and that this affected him to such an extent that it impaired his ability to drive or control the vehicle.
OSTI reviewed the evidence of the witnesses as well as the video footage:
- The security guard advised that he was too far away from the driver to confirm that the driver smelled of alcohol.
- The towing operator indicated that the police were present at the scene but did not test the driver for alcohol.
- Passenger 1 advised that the incident driver was not driving too fast – he lost control when overtaking another vehicle.
- Passenger 2 stated that the incident driver was not drunk but that he was tipsy. The witness advised that he himself was drunk when compared to the others.
- The insurer submitted that in the video footage the incident driver was clearly unsteady on his feet and his eyes were bloodshot.
According to OSTI, one could not establish from the video footage whether the incident driver’s eyes were bloodshot or not. In addition, the footage of the incident driver was footage provided after the accident. On the insurer’s own version, the insured vehicle had overturned in the accident. The incident driver’s gait, which the insurer sought to rely on, could on the probabilities have been as a result of the accident. The footage in itself did not indicate on a balance of probabilities that the incident driver was under the influence of alcohol at the time of the accident.
OSTI advised that the insurer had not discharged the onus of proving that the policy exclusion relied on applied to reject the claim, on a balance of probabilities, and recommended that the insurer settle the claim, which it duly did.
Driving under the influence still remains a very real problem for the insurance industry and consumers must be cautioned that rejection may not only be justified on circumstantial evidence but could have dire consequences if DUI testing is conducted, including rejection of the claim.
“The reality is that Insurers are there to pay valid claims due to sudden and unforeseen circumstances – any scenario where there is proven recklessness could see your claim rejected for failing to take a due care to prevent loss. Insurers are able to back up such claim rejections with technology such as vehicle telematics reports which show the speed of the vehicle just before impact, accident reconstruction experts and eye-witness reports if they believe the cause of the claim is related to illegal or reckless behaviour. Getting behind the wheel of a car when you are over the legal alcohol limit, under the influence of narcotics, talking on your phone while driving without a car kit or driving at excessive speeds – all of which are illegal behaviour – would see Insurers well within their rights to reject claims on this basis if proven,” Mandy Barrett of insurance brokerage and risk advisors, Aon South Africa recently explained.
Your role as a financial adviser, to guide your client towards a comprehensive understanding of the material terms and conditions of the contract is therefore very important.
Click here to download the specific OSTI case as discussed in one of their publications
