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By unknown | Mar 04, 2009 | COMMENTS [ 0 ]

Some insurance companies will do anything to repudiate a claim.

Some insurance companies will do anything to repudiate a claim.

The reasons may vary from empty alcohol bottles in a crashed vehicle to dates of debit orders of premiums, even though the company had previously agreed on the date.

This was the case with Gerson Nemandodzi. His claim was repudiated "due to his failure to maintain payment of the premiums".

When Nemandodzi bought a Mazda 626 from Combrink Car Sale in July 2006, the dealer referred him to African Independent to help him choose an insurance company. He insured with Hollard Insurance.

African Independent asked him to choose a date, between the 1st and the 15th of each month, for the debit order to go through, Nemandodzi said.

"I chose the first day of each month, but the debit order went through on the 15th for the past three years," he said.

Thirteen days after taking out the policy, he was involved in an accident. The claim was declined on the grounds that he did not pay his premiums.

He has continued to pay the premiums. Hollard acknowledges the payments.

The vehicle has not been assessed since the accident at Thohoyandou in Limpopo three years ago.

Hollard responded to Consumer Line's inquiry after six months. They said they had acted within their right when they repudiated the claim.

Their broker, Naresh Tulsie, said Hollard rejected the claim because Nemandodzi had failed to pay the premiums.

Last Thursday, Hollard's select brokers general manager Steven Bennett confirmed Tulsie's reasons for rejecting the claim.

He acknowledged that Nemandodzi's preferred debit order date was the 15th of each month, on which they had received their premiums for the past three years, but said they preferred to receive the money on the first day of each month.

He could not explain why the company did not debit the premiums on the date they preferred.

Nemandodzi is convinced his claim was unfairly repudiated.

"I had the accident on July 28 2006, but Hollard and its brokers preferred to record my date of loss on August 11 2006, to suit their repudiation," said Nemandodzi.

His bank statements also verified that Hollard is continuing to debit his account on the 15th of each month, even though Bennett insisted that the due date was the first day of each month.

Bennett said they were not in contravention of the Fais Act and that the Fais (Financial Advisory and Intermediary Service) ombudsman was not the appropriate person to hear Nemandodzi's matter.

On Monday, Krisen Govender of Hollard offered to reconsider their decision for repudiation, but he had not responded to Consumer Line by the time of going to print.

Fais Act conditions:

l The Fais Act requires that an authorised financial service provider should render financial service honestly, fairly with due skill care and diligence and in the interest of clients and integrity of the financial service industry at all times.

l Section 11 of the Act requires that a provider must at all times have, and effectively employ procedures and an appropriate technological system that can reasonably be expected to eliminate, as far as reasonably possible, the risk that the client, product suppliers and other providers or representatives will suffer financial loss through theft, fraud, other dishonest act, poor administration, negligence, professional misconduct or culpable omission.

Nemandodzi has now approached the Fais ombudsman for help.

Fact File:

l Nemandozdi took a policy though African Independent in 2006.

l African Independent/Hollard's preferred debit order date was the 1st of every month, but they debited his account on or around the 15th of each month from 2006 to date.

l Nemandodzi had the accident on July 28 2006, but Hollard or African Independent captured the date of loss as August 11 2006.

l His case number is 803/07/2006, which further proves that the accident occurred in July and not in August as Hollard captured/recorded the date of loss.

l The erroneous date, August 11, allows Hollard to repudiate the claim on the basis that he did not pay his premium on August 1.

l On August 1, there is no attempt by Hollard to debit the premium, yet they repudiated the claim based on non-payment.

They made an attempt on August 15 2006 but hid behind failure to pay.

l And if Hollard insisted on receiving payment on the first of each month, it is still within the protected period as Nemandodzi had three days to claim before his August premium was due.


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