South African car insurance companies rejecting claims due to speeding

The Ombudsman for Short-Term Insurance (OSTI) has warned of a rise in car insurance claims being rejected and disputed due to insurers alleging that drivers did not take “reasonable precautions” in preventing an accident, including sticking to speed limits.

Senior assistant ombudsman Ayanda Mazwi said the OSTI’s complaint trends reports conducted in November 2021 showed a surge in motor vehicle accident rejections by insurers based on the insured breaching a contractual “duty of care” clause.

This clause requires an insured motorist to use all “reasonable care and take reasonable precautions” to prevent or minimise loss, damage, death, injury or liability. Should the driver breach the clause, their claim may be rejected.

Mazwi said there were several reasons why an insurer might invoke this clause, but the primary basis for most rejections was that the insured was driving above the regulated speed at the time of the accident.

In these instances, it is up to the insurer to prove that the motorist had exceeded the speed limit.

“It may rely on evidence such as data downloaded from the vehicle’s onboard computer vehicle tracking reports and experts in accident reconstruction,” OSTI explained.

When a dispute is lodged with the OSTI by an insured person whose claim has been rejected, the ombudsman will firstly consider the evidence of speeding and determine whether it is reliable.

The ombudsman provided two scenarios with contrasting outcomes for claim disputes.

In the first instance, the OSTI ordered an insurer to pay a claim it initially rejected after determining the conclusions put forward by an accident reconstruction expert were not accurate.

“The expert, in that case, 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,” OSTI said.

Generally speaking, data from a car’s onboard computer and vehicle tracking reports indicating the vehicle’s speed when the accident occurred are accepted.

Ayanda Mazwi, Senior Assistant Ombudsman

However, even if this confirms that the driver was speeding, it would not mean the claim can be rejected by default.

“An insurance policy may not, by default, exclude liability because the insured was negligent,” OSTI said.

The onus is on the insurer to prove that the insured had driven recklessly rather than simply being negligent.

According to OSTI, speeding on its own does not necessarily mean that the insured was reckless.

“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.”

Because a driver is unlikely to admit to recklessness, it may be determined by “inferential reasoning” based on the facts of the case.

What qualifies as recklessness

In another case, the OSTI found a driver had acted recklessly and that the insurer’s rejection of their claim was substantiated.

This matter involved a driver who had hit a tree after speeding at 104km/h in a 60km/h zone.

The driver defended his speed by stating he was not familiar with the road, the visibility on it was poor during the night, and the streetlights were not working.

“The insured stated that he had not seen the intersection ahead. When another vehicle suddenly approached from his left-hand side, he had to take evasive action, which caused him to lose control and collide with a tree,” OSTI said.

Based on these factors, the OSTI found that 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 or a sudden emergency.

Furthermore, a speed limit sign was prominently placed ahead of the intersection where the accident occurred.

“The insurer’s accident reconstruction expert calculated that the insured was travelling at 104km/h at the time,” OSTI said.

In conclusion, the OSTI determined that the insured’s conduct would be considered reckless if the expert’s speed calculation were proven.

“As a matter of probability, the insured’s conduct was also found to be the cause of the accident because, had he observed the regulated speed, he would have been in a better position to see the intersection, stop and safely execute the turn,” the OSTI said.

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South African car insurance companies rejecting claims due to speeding