Six Ways To Avoid Having Your Insurance Claim Rejected

Insurance claim

The short-term insurance industry in South Africa has been hard hit by crime, and insurance companies scrutinise every new claim. This and the fact that insurance companies don’t pay out unless they have to, makes it vital that policy holders are able to beat insurance companies at their own game.

You can make sure the insurer settles your claim in full, for instance, by learning the main tactics insurance companies use to avoid settling claims.


1. You provided incorrect information as the policy holder

Example: a lecturer states that he is a ‘teacher’ and it invalidated a subsequent claim. Always be honest with insurers – disclose convictions and previously refused or cancelled policies. Insurers do share data like this with each other.

2. You didn’t disclose material facts

You have to disclose all facts including anything that might cause the insurer to view you as a greater risk, and charge a higher premium. The only problem is it’s almost impossible to know what these might include. For example, the insurer refused one insurance claim for a car theft simply because the policy holder did not disclose he lived near to a youth club; which allegedly increases the risk of car theft by joyriders. Always give potentially relevant information, even if they don’t ask you about it.

3. Your policy doesn’t cover everything

Example: one household policy covered the cost of consequential damage resulting from a burst pipe, but not for replacing the pipe – which was far more expensive. Most policies do not cover everything, even so-called ‘comprehensive’ ones. If you don’t state something in the policy, they almost certainly won’t cover it. Always ask for written clarification when necessary. Furthermore, verbal assurances count for nothing when it comes to a claim unless you can prove what you discussed.

4. Read the fine print

Insurance companies are experts at advertising and may imply that an advertised policy gives you complete cover, but it doesn’t. Small print and its interpretation are no joke. So, study the details of the policy itself, not the marketing hype. What appears straightforward when you’re buying a policy is likely to become hedged with ‘complexities’ when you lodge a claim. By law, insurers register with the Financial Services Board and Registrar of Financial Institutions. It is unlikely that an insurer will fraudulently pretend to be under the Financial Services Board. But, play safe by dealing only with companies that you know and, if possible, others recommended to you.

5. Fill out the proposal form yourself; or check it is properly completed

An incomplete or incorrectly completed form can invalidate the policy – but they won’t tell you that until you claim.
Never ever rely on a broker or intermediary to do it for you. Furthermore, don’t forget to reveal all the facts – anything that might be of any relevance. If it’s not included, it’s excluded. Also, clarify in writing if necessary.

For example, ‘new for- old’ cover normally needs clarification. It usually applies only to completely lost or destroyed goods. If you can repair them, the insurance company may insist on this.  Ensure you understand exactly what each term and phrase means.

6. Notify insurer of any changes

If you take in a lodger, this can affect your household cover, and even invalidate any subsequent claim. Even something as trivial as acquiring a pet can do the same if it’s not covered by the policy. Always keep proof – retain copies of everything from the advertisement through the proposal form to the insurance policy and letters of clarification. Never rely on the insurer to provide you with any evidence in the case of a claim. Avoid inflating claims to make up for any inconvenience caused to you. They will queried these, and reject the whole claim.

What happens when you don’t get satisfaction from the insurer

If you believe they might have bent the law in some way, contact the Executive Officer of the Financial Services Board at PO Box 35655, Menlo Park 0102.

In addition, if the insurer refuses your claim on a life policy, you can appeal to the Ombudsman for Life Assurance, Private Bag X45, Claremont 7735. Telephone (021) 657-5000, fax (021) 674-0951 or e-mail: You can contact the short-term insurance ombudsman on (011) 726-8900, fax (011) 726-5501. The ombudsman’s office will examine the facts to determine whether the insurer is in the right, and may advise settlement.

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2 Comments on Six Ways To Avoid Having Your Insurance Claim Rejected

Shimanga said : Guest 5 years ago

Sorry Carol, they rejected my insurance claim after my car was stolen a few years ago. Wish I had known all this earlier. All the best!

Lois Carol Wessels said : Guest 5 years ago

Thank you for the information - having huge difficulties with Outsurance thus referring the matter to the ombudsman!

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