You’re claim has been rejected, what now?

Updated: Mar 3

There are few things in life as disappointing and frustrating as finding out that your insurer has rejected your claim.


The good news is: A rejected claim is not necessarily the end of the road.


Due to the combined impacts of Covid-19 and the general state of the economy, insurers have become extremely strict in approving claims. And when I say strict, trust me: Strict!


If they can find any reason to reject a claim, they will reject it.


And this isn’t just one or two insurers, either. It’s ALL of them.


Here’s what makes this situation even worse: Insurers know that most clients don’t have the time, energy or resources to dispute claims. They don’t expect you to fight them.


So here’s this month’s key lesson: You don’t have to just accept their decision. You can totally fight them.


No, not with fists.


With facts.


Here’s a great example of what I mean:


A client of mine lodged a claim with his insurer relating to a leaking pipe in a ground floor ceiling. The insurer sent a representative out to inspect the leak. The representative decided that there was no leaking pipe and that the source of the water damage was in fact a poorly waterproofed shower in the vicinity.


There was just one problem: My client was a plumber. And he had been itching to find a reason to renovate that old bathroom anyway.


So he did what any plumber with a hammer and a point to prove would do: He tore his bathroom up.


Eventually, he reached the pipe in question. I’ll bet you can guess what happens next, right?


That’s right: The pipe WAS leaking.


It was proof that the insurer’s representative’s conclusion was wholly incorrect.


So, my client went back and challenged the insurer’s decision. He provided video and photographic evidence of the leaking pipe.


The claim was paid out.


Here’s what to do if your claim is rejected:


Step 1: Decide whether you want to actually fight the insurer’s decision. This sounds like a silly thing to say, but the truth is that sometimes people lodge claims even though they know that they’re taking a fat chance with the insurer. They know it’s not a legitimate claim.


If your claim falls into that category, then it is probably not in your interests to challenge the insurer’s decision. You’re not likely to succeed.


If you DO decide to challenge the repudiation of your claim, proceed to Step 2:


Step 2: Gather evidence. You’re going to need evidence to prove the facts of your claim. Be prepared to spend some time and money gathering that evidence. You may need to hire a specialist to come and give you a second opinion.


If you go this route, it is SUPER important that you get a REPUTABLE company in. Don’t phone your Oom Frikkie’s bakkie-based contractor company. While I’m sure your oom knows what he’s doing, your insurer won’t take his word seriously.


You need to get a big, recognisable, reputable industry name in to assess the situation. That callout won’t be free, and the cost is coming out of your pocket, at first.

BUT the good news here is that, if your challenge to the insurer’s decision is successful, then the insurer will reimburse you for the cost of that callout.


Using your insurer’s internal processes, submit all of your new evidence from your expert’s assessment. If you need help with this step, I will be happy to provide advice or direction to try and give your challenge the best chances of success. But…


If your challenge to the rejection of the claim is still unsuccessful, it’s time to proceed to Step 3:


Step 3: Bring in the OSTI big guns:


Here’s where I step out of being able to assist with the process. If you still believe that your insurer is wrong and that you have a legitimate case, it’s time for you to contact the Ombudsman for Short-Term Insurance (‘OSTI’).


You’ll need to open your case on their website: https://www.osti.co.za/ Click the big ‘Lodge a Complaint’ button in the middle of the home page to get started.


The OSTI will require quite a bit of documentation from you, including a detailed statement from you with your version of events. That will then be provided to your insurer who will need to respond.


Once your insurer has responded to that, the OSTI will request that you provide a response to their statement.


The case then goes into the queue and will soon be decided by a specialist who will issue a ruling either in your favour or in the insurer’s favour.


If you lose this step as well, it may be time to admit defeat. But it doesn’t have to end here.


The OSTI complaint process doesn’t prejudice your right to lodge a legal claim against your insurer. You are entitled to take your insurer to court if you still believe you have a case, even if the OSTI ruled against you.


This will obviously involve you having to hire an attorney and the case will need to work its way through the legal system, with all of the costs, inconvenience and hassle that entails.


Prevention is better than cure


The best way to avoid having to deal with all of this, is to ensure that you fully understand your policy wording. That’s the reason I send you an email every month. Empower yourself with the facts, and make sure that your assets and possessions are correctly insured. That way, when something goes wrong and it’s time to claim, you are already one step ahead of the next person.


Contact us if you have questions or concerns about your policy.


Always fighting in your corner,



The Optimum Insure Consulting team.

Written by Stephan Kruis

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