Home South African Insurance industry can’t automatically reject claim over expired driving licence

Insurance industry can’t automatically reject claim over expired driving licence

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Concerned motorists have been asking the South African Insurance Association (Saia) how insurers would treat motor vehicle claims where the insured person’s driver’s licence has expired after August 31. Photo: File

Concerned motorists have been asking the South African Insurance Association (Saia) how insurers would treat motor vehicle claims where the insured person’s driver’s licence has expired after August 31.

Concerned motorists have been asking the South African Insurance Association (Saia) how insurers would treat motor vehicle claims where the insured person’s driver’s licence has expired after August 31.

“In short, drivers can take comfort in the fact that an insurer will not automatically reject a claim where a licence has expired,” Saia said today.

“This matter is particularly relevant when there are backlogs or delays in getting appointments at Drivers Licence Testing Centres (DLTCs).”

Saia said insurers followed the guidance provided by the Ombudsman for Short-term Insurance (OSTI) who had, from as far back as May 2007, ruled that insurers should not refuse to entertain the claim if the driving licence or licence disc has expired.

To determine an equitable outcome, the insurer would need to demonstrate prejudice because of the failure to be in possession of a valid licence, therefore materiality was a critical factor for consideration.

The OSTI said the insurer should consider the full merits of each claim before making a decision and not reject claims solely because a driving licence had expired.

Therefore, as each individual claim was judged according to its own merits, in some cases, after examining the particulars of a claim, an insurer might determine that not having a valid licence was material and, therefore, directly relevant to the claim. In such a case, a claim might be denied.

Saia advised the policyholder to proactively contact their respective insurer or broker to make them aware of difficulties being experienced in getting a licence renewed, as well as provide evidence that the renewal application had been made or at least that attempts have been made in that regard.

Insurers would make the necessary concessions for valid claims in consideration of that, it said.

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