The Ombudsman for Short-term Insurance (Osti) ruled that an expert’s findings on which the insurer relied to reject a claim were unreliable.
The policyholder submitted a claim for storm damage to his jacuzzi’s pump. His claim was supported by a report from a contractor stating it had detected water damage, possibly from the heavy rain, on the wiring.
But the insurer’s expert said the damage was the result of gradual wear and tear. He said the pump’s bearings were in the process of ceasing, and it had a faulty capacitor.
Based on the expert’s findings, the insurer rejected the claim, invoking the policy’s provisions that exclude liability for wear and tear and for maintenance costs, and require the insured to maintain the building and minimise loss or damage.
The policyholder maintained that the damage was caused by heavy rainfall. He said the expert’s findings were speculative because he had not disassembled the pump.
The insurer said its expert did not have any reason to remove and disassemble the pump, and it would have been liable to reinstate the damaged pump if it had been removed and disassembled.
The ombudsman’s decision
The Osti said the findings by the insurer’s expert were unreliable because he had not used a multi-meter to test the capacitor.
The insurer conceded that the multi-meter test was the ultimate determinant of the cause of the damage but wanted the ombudsman’s office to consider the expert’s experience.
Quoting from Nienaber and Reinecke’s Life Insurance in South Africa, the Osti said the insurer bears the burden to prove its application of the policy exclusion. “The basic rule is that he who asserts a fact which is in dispute must prove it.”
The Osti said the insurer had failed to do this.
The insurer accepted the Osti’s recommendation that it settle the claim.