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Insurance claims: REJECTED!

“Rather safe than sorry” is the best motto as far as short-term insurance is concerned. It is too late for tears when a short-term insurance claim is being rejected due to your ignorance concerning the terms and conditions (T’s and C’s) of an insurance policy.

These are the most common reasons for the rejection of short-term claims for vehicle, contents or homeowner’s cover.

 20 reasons why claims are rejected:

  1. Unlicensed driver: This surely speaks for itself.

  2. Vehicle not roadworthy: If you are involved in an accident and your vehicle’s wipers didn’t work or the tyres needed to be replaced, a claim could be rejected.

  3. Reckless driving: Be aware of the “failure to take care” clause. “This refers to recklessness, not to be confused with negligence.” Also look out for the “breach of road traffic regulations” clause. If you were exceeding the speed limit at the time of an accident, your claim could be rejected.

  4. Drunk driving: The consequences are well-known.

  5. Driver not the “regular driver”: Some policies cover only the regular driver of the vehicle. Others cover a named driver or any licensed driver. Misrepresentation by policyholders regarding the driver of the insured vehicle at the time of an accident is common. Since young drivers pay higher premiums due to the high risk they pose to the insurer, they might be tempted to list a parent as the regular driver. When the opposite is revealed, the claim is false and could therefore be repudiated.

  6. Total-loss policy: This cover applies only when the insurer deems the vehicle to be a total write-off. Sometimes policyholders only realise that they had this type of cover after their claim has been rejected.

  7. Telematics data shows driver fault: Telematics is technology used to track and recover your vehicle if it is stolen, and/or monitor your driving behaviour. Some insurers insist on fitting a telematics device to your vehicle. “The data from a telematics device are able show a breach of speed limit or reckless driving leading up to an accident, which may result in a claim being rejected.” The evidence is difficult to dispute. However, some insurers use telematics to reward good driving. In other words, telematics may be used as a carrot or a stick. “Make sure you know how the insurer is going to use this information.”

  8. Tracker device not fitted: If your cover is conditional on your car being fitted with a satellite tracking device, your claim will “probably” be rejected if you fail to comply with this condition.

  9. Vehicle inspection not carried out: Some insurers insist on inspecting your vehicle at inception of the policy in order to prevent disputes about pre-existing damage to the vehicle. Failing to comply, will be regarded as breach of contract and claims may be rejected.

  10. Material non-disclosure at underwriting stage: Your claims record, a break-in insurance cover, prior applications for cover being rejected, and judgments on your credit record are all material to the assessment of your risk profile. It is imperative that you disclose such information. (For example, people with a bad credit record have a higher propensity to file fraudulent claims than people with a clean credit record.) “Making a false statement may result in your claim being rejected.”

  11. Vehicle used for business: If you plan to use your vehicle for business, you need to disclose this to your insurer. “In my experience, insurers are very reasonable about this, and won’t increase your premium if you seldom use your vehicle for business.”

  12. Vehicle not parked securely at night: If you state that your car is parked securely at night – in a garage or off the street – and, in the event of theft, it is discovered that the vehicle was parked in the street on a regular basis, your claim could be rejected.

  13. Security device not fitted: If you’re required to have your car fitted with an alarm or a gear lock and you don’t comply, your claim may be rejected.


Homeowner’s insurance is cover for your home (the building, not the contents). “Remember that the insured value is not what you could receive if you sell your property; it reflects the cost of replacing or rebuilding your home at today’s values. Beware of relying on bank valuations.” Even if the insurer is associated with a bank, make sure your home is not undervalued.

The following reasons for homeowner’s insurance disputes:

  1. A peril you aren’t covered for caused the loss: If your loss was the result of “gradual deterioration” and “maintenance” issues, you aren’t covered. Homeowner’s insurance typically covers you for storm and fire damage.

  2. Poor design and faulty workmanship: These are usually not covered.

  3. Retaining walls not built to acceptable standards: Retaining walls have to be built according to engineering specifications. If a landscaper – and not an engineer – built your retaining wall and it collapses, your insurer might not pay out.

  4. Subsidence: If your house is built on clay, cover for subsidence is “normally excluded.”

  5. Unoccupied premises: “If you leave your home unoccupied for, say, 30 days, without advising your insurer, it could have grounds to repudiate a claim.”

  6. Movables not covered: Disputes often involves: What is a fixture? What is the difference between an immovable and a moveable item? Homeowner’s insurance only covers permanent fixtures.


Most claims for contents cover are rejected in terms of the average clause, because policyholders tend to be under-insured.

  1. Inflated and fraudulent claims: “Don’t inflate your claims. Most policies carry a forfeiture clause, so if you are caught out, you may have to forfeit all benefits regarding the policy – in other words, the insurer is entitled to repudiate the entire claim.”

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