The ombudsman for short-term insurance (OSTI) in South Africa has revealed that a rising number of car accident claims are being rejected on the basis of a “reasonable precautions” clause, reported MyBroadband.
OSTI conducted its complaint trends report in late 2021, which showed a surge in car insurance claim rejections due to the insured’s breach of their contractual duty of care.
“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,” said OSTI.
“A breach of the clause by the insured may warrant the rejection of a claim.”
OSTI said that insurers invoke the reasonable precautions clause for several reasons.
In cases handled by the organisation, it said the chief reason for claim rejections by insurers was due to motorists driving above the speed limit at the time of the accident.
While the insurer is allowed to reject a claim, it must still prove that the motorist was in fact speeding when the incident occurred, said OSTI.
“It may rely on evidence such as data downloaded from the vehicle’s onboard computer, vehicle tracking reports, and experts in accident reconstruction,” said OSTI.
If a claim is rejected and the motorist lodges a dispute with the OSTI, it will firstly consider the evidence of speeding and determine whether it is reliable.
OSTI said the vehicle’s onboard computer and vehicle tracking reports are usually sufficient evidence for an insurer to reject a claim, but that simply driving over the speed limit does not mean the claim may be automatically rejected.
For this to happen, the insurer must be able to prove that the motorist was not driving negligently, but rather recklessly.
“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,” said OSTI.
“Alternatively, the driver simply did not care that the measures were inadequate and therefore recklessly reconciled himself/herself with the danger.”
If a driver does not admit recklessness, the insurer may use “inferential reasoning” based on the facts of the case to determine whether the motorist was acting in such a way.
When OSTI sides with the insurer
In one case considered by OSTI, it found that a driver acted recklessly after he hit a tree at 104km/h in a 60km/h zone.
The driver claimed that he was unfamiliar with the road, visibility was poor at night, and street lights were not working. When he noticed another car approaching from the left at an upcoming intersection, he took “evasive action” which caused the vehicle to lose control and collide with a tree.
“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 or a sudden emergency,” it said.
“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.”
“If the expert’s calculation of the speed was proven, the insured’s conduct would be considered reckless.”
For these reasons, OSTI said it found in favour of the insurer.