Long-Term, Short-Term Insurance Ombuds recovers over R400m in lodged disputes

Insured South Africans, whose claims are rejected by insurance companies, can file complaints with the two Ombudsmen depending on the nature of their dispute.

FILE: The Ombudsman for Short-Term Insurance finalised a total of 10,879 formal complaints, with 43% of these related to motor vehicle disputes. Picture: thamkc/123rf.com

JOHANNESBURG - The Ombudsman for Long-Term Insurance and the Ombudsman for Short-Term Insurance on Tuesday said they recovered close to R400 million for consumers who lodged disputes with the entities last year.

Insured South Africans, whose claims are rejected by insurance companies, can file complaints with the two Ombudsmen depending on the nature of their dispute.

There were over 27,000 complaints received over the period albeit that not all were chargeable or finalised.

The Ombudsman for Short-Term Insurance finalised a total of 10,879 formal complaints, with 43% of these related to motor vehicle disputes.

This represented 11.7% fewer complaints last year, as compared to 2020.

Two hundred and fifty-nine of the complaints were COVID-19 related, making up 2.6%, a notable decline compared to 2020.

The Short-Term Insurance Ombudsman's Peter Nkhuna flagged some of the trends noted in the 2021 report: “There are two main trends that have been ongoing [and] the one is in motor, where insurers tend to, a lot of the time, rely on the lack of due precaution and then from the perspective of claims where consumers may not be taking care of their property.”

Meanwhile, there was a total of 31 complaints resulting from the July civil unrest when people looted and damaged infrastructure in KwaZulu-Natal and Gauteng.

Victims of the unrest were covered by the South African Special Risk Insurance Association.

MOTOR-RELATED COMPLAINTS THE HIGHEST DISPUTES

The Short-Term Insurance Ombudsman said although motor vehicle accident-related complaints declined by 8% in 2021 as compared to 2020, they still represented the highest type of disputes handled by the entity.

The Ombudsman’s annual reports for 2019 and 2020 show that there is an upward trend in the number of complaints relating to accident claims rejected because drivers fail to exercise reasonable precautions and due care, with the cases increasing by 48%.

In 2020, the office recorded the lowest number of complaints in the category at 12% compared to 2019 as South Africans stayed home during the hard COVID-19 lockdowns.

The complaints went up by 26% last year. The claims were rejected based on allegations that drivers were speeding.

However, in cases where formal rulings were made against insurers, the ombudsman cautioned against a misunderstanding of the role played by experts and expert reports in dispute resolutions.

This was followed by theft and hijack claims, which comprised of 7%.