Email mix up costs insurer R681,000

A motorist whose vehicle theft claim was initially rejected by his insurer — for failing to fit a secondary tracker in his car — has found reprieve after an industry ombudsman ordered the insurer to pay more than R680,000 to its client.

Christo Nel dragged Barton Insurance Brokers of Parktown, Joburg, before the consumer tribunal when his claim for vehicle theft was repudiated in July 2023. This after he could not produce proof of a second tracker in his stolen Toyota Fortuner 2.8 GD6 4x4. 

Nel claimed he never received a March 2023 alert that Barton had issued via email, to its clients who were driving high-risk vehicles, to warn them about fitting a second device as a backup.

He said he only found out after his car was stolen that Barton had sent the notice to his wife’s email address and not his own as the policyholder.

Nel and his wife were co-policy holders from 2018 until 2020, when he bought the Toyota Fortuner and removed his wife.

However, her contact details remained on Barton’s internal system. Barton also failed to make a follow-up call to Nel informing him of the email as a warning. It is standard procedure for insurers to adequately inform clients of any changes to their policies.

According to the Financial Advisory and Intermediary Services Act (FAIS) ruling, Barton conceded that the notification process was planned to ensure every policyholder was advised and contacted personally.

It confirmed that out of all its clients, only Nel did not receive the call.

Barton had also argued that there were no prior instructions from Nel to change the contact information on the company’s IT system. 

The tribunal closed the matter in April 2024 in favour of the company, claiming Nel had no reasonable prospects of success.

At the time, the office believed Mr Nel could not provide evidence of a specific instruction to Barton to change the email address on record.

The tribunal then ruled that Barton could not be expected to unilaterally change the email address on record without direct instruction from the complainant as the policyholder.

However, Nel challenged the decision and the matter and evidence was reviewed by FAIS ombudsman advocate John Simpson.

“Barton is correct in its basic submission,” he said. “Under normal circumstances, it would be highly unusual and concerning if an adviser changed a client’s contact details without direct instruction.

“However, as much as details cannot be changed without instruction, an adviser is equally expected to review policies and request guidance or instruction, where applicable.

“It would be reasonable to expect an adviser to seek instruction or guidance from the client if there is a material change in the nature of the policy,” said Simpson.

He went further to say it was not in dispute that Nel changed the policy from a co-policyholder with his wife to being the sole policyholder in 2020.

“This is a material change that would alert the reasonable adviser to review the contact details in the policy and ensure that they are still correct.

“A change from a co-policyholder to a sole policyholder is not a minor and insignificant change. It embodies a clearly implied instruction that the previous co-policyholder is no longer a client in terms of the policy and should be removed from the contact list.

“At the very least, Nel should have been asked whether the contact details on its system should remain the same. There is no evidence that the contact details were reviewed, and Barton confirms that the email address was not changed at that time.”

Simpson said that had Barton changed the email address on its system to the correct one, Nel would have noted the notification of the new tracker requirement.

Simpson ordered Barton to pay Nel R681,250.00 as the sum insured for the vehicle and pay interest on the said amount at a rate of 11.25% per annum from the date of the order to the date of final payment.

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