The South African Insurance Association (SAIA) says that an expired driver’s licence card or disc is not a valid reason for insurers to outright deny a car insurance claim.
SAIA said it received new enquiries from concerned motorists about how insurers would treat motor vehicle claims where the insured person’s driver’s licence card has expired after 31 August 2021.
That date is the deadline for the grace period given by the government to thousands of motorists whose licence cards expired between 26 March 2020 and 31 December 2020.
Many motorists have struggled to secure renewal appointments for their licence cards at Drivers Licence Testing Centres (DLTCs) due to a substantial backlog worsened by the Covid-19 pandemic.
SAIA stated that drivers could take comfort in the fact that an insurer will not automatically reject a claim where a licence card has expired.
“This matter is particularly relevant when there are backlogs or delays in getting appointments at Drivers Licence Testing Centres (DLTCs),” SAIA said.
The Association explained that insurers were guided by the Ombudsman for Short-term Insurance (OSTI), which ruled as far as back as May 2007 that insurers should not refuse to entertain a claim if the driver’s licence card or licence disc has expired.
To determine an equitable outcome, the insurer should consider the full merits of each claim before making a decision, SAIA said.
It would need to demonstrate prejudice because of the failure to have a valid licence. Therefore “materiality” was a critical factor for consideration.
In cases where the insurer determined that the lack of a valid licence was material and directly relevant to the claim, the claim might be denied, SAIA said.
The Association recommended that car insurance policyholders proactively contact their respective insurer or broker to make them aware of difficulties being experienced in getting a licence renewed.
They should also try and provide evidence that the renewal application has been made or, at least, that attempts at renewal have been made.
“Insurers would make the necessary concession(s) for valid claims in consideration of this,” SAIA said.
Civil action group Outa has called on transport minister Fikile Mbalula to extend the grace period deadline beyond 31 August.
The organisation said it had received numerous complaints from frustrated motorists who could not secure bookings for renewals.
The Road Traffic Management Corporation (RTMC) recently acknowledged a significant backlog of 500,000 licences that were still not processed.
The Democratic Alliance has made several proposals to address the renewal process, including scrapping the online booking system and allowing walk-ins for bookings.