Bank rejects insurance claim over 'shoddy work'

A homeowner is fuming after Absa rejected her house insurance claim because she had allegedly used inferior material to build her home.

Masingita Maswanganyi's house roof was blown away by a thunderstorm in February last year and when she claimed for insurance, Absa rejected based on poor workmanship and weak nails that were used in building the roofing of her house. She has been paying R390 monthly on her premium.

The terrible thunderstorm had left a gaping hole in the ceiling of her house in Limpopo which she had not been able to close.

“I approached Absa immediately after the incident because I had been paying them diligently all these years. I was shocked when my claim was rejected and they told me that the material I used to build my house were not approved by them and that was as per the report of their inspector, who inspected the property after the incident,” said Maswanganyi.

She says she used a qualified builder. 

“I was shocked because they did not even bring someone to inspect my house when I took the insurance. How was I supposed to know which materials were appropriate? This is unfair,” said Maswanganyi.

In their response, Absa said they did all they could for Maswanganyi and that the matter even went as far as the ombudsman where her claim was also rejected.

“We understand that she has suffered a loss and sympathise with her position. At Absa Insurance we pay all valid claims as set out in the terms of the agreements we enter into with our customers. Unless specified in the terms of a customer’s policy, damage on an insured structure that is the result of gradual deterioration or wear and tear will not be covered.

"In this instance, we have reviewed all opportunities to help our customer. This matter was also referred to the National Financial Ombud Scheme. Having thoroughly reviewed the merits of the matter, the Ombud found in favour of Absa Insurance,” said Collin Molepe, managing executive at Absa Insurance.

He said when an insurance agreement is entered into, it is done so in good faith and they rely on the information provided by the insured party during the application process to establish the cover required.

“It is only in certain instances that we send assessors or evaluators to verify the information at the time of policy acceptance, which was not the case in this matter,” said Molepe.

In a bid to ensure customers don’t find themselves in a predicament where their claim is repudiated, Absa said they have implemented the after guardrails:

• Policy wordings: We ensure that our policy documents are easy to understand, concise and transparent about coverage, exclusions and limitations.
• Accurate risk assessment: Our underwriting team is equipped with tools to ensure we conduct appropriate and thorough risk assessments during the underwriting process to identify potential vulnerabilities.
• Insurer-policyholder communication: We have open communication channels where policyholders can make contact with us by telephone or email to ask questions, raise concerns or seek guidance.

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