According to the OSTI report, the highest number of disputes, or 42% of overall claims, were related to motor vehicles. The majority of these complaints were accident-related claims that were declined because of policy exclusions, states Tarina Vlok, MD of Elite Risk Acceptances, a subsidiary of Old Mutual Insure. Most of them were due to a lack of due care or precaution in preventing or minimising loss, especially where speeding was involved, as well as misrepresentation or non-disclosure.
The second highest number of complaints, at 25%, related to homeowners claims. Most of these claims were damage caused by acts of nature, yet insurers rejected them due to gradual deterioration, lack of maintenance and wear and tear, as well as design or construction defects, she says.
Gap in customer education
What the OSTI report points to is significant gap in customer education, says Vlok. Many customers dont know what constitutes a valid claim and whats required for a successful claims experience.
In one case reported on in the OSTI report, the insured put in a claim for a collapsed boundary wall. The homeowner said that the damage was due to strong winds during a storm, she comments, but the insurance company disagreed, saying the wall was in bad shape due to weeds and a lack of maintenance. In the end, the OSTI ruled in favour of the insurer.
