Clarity on a refuted claim

Brevity can sometimes also be the soul of a twit.

In a recent article on a complaint dismissed by the FAIS Ombud, we wrote:

This case concerned a claim that was declined as the insured’s vehicle was not roadworthy. He complained that the intermediary did not notify him of a change in insurer. The case was dismissed as the reason for the claim being refuted was worn tyres, and no insurer would have entertained the claim.

This may have created the impression that any old claim would have been dismissed, even where the worn tyres were not the cause of the loss.

Ben Tonkin wrote as follows:

The question is whether or not the condition of the tyres was relevant in causing the loss. Surely in order for a claim to be fairly declined for the reason of smooth tyres, the tyres must have been the reason, or contributed to the reason that the loss took place. For example, smooth tyres are irrelevant when an insured’s car is hit while stationary at a robot, but may be very relevant when a car travelling at speed skids on a wet road. Unfortunately there are insurers that will use lack of roadworthiness to reject a claim whether the condition of the car is relevant or not, hence we need TCF legislation.

A second perusal of the Ombud case revealed the following:

“The reason for rejection was that the vehicle was not in a roadworthy condition, as contemplated in the wording of the policy. The tyres were worn and were “material to the cause of the loss”.

Thanks, Ben, for pointing this out.

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