An insurance company won't pay a motor theft claim if it deems the policyholder or nominated driver to have been negligent in some way. But negligence is a somewhat subjective term; motorists must be aware that insurers can refuse to pay out claims based on how they interpret their clients' actions and circumstances.
On a recent holiday in New Zealand, I saw an unattended car parked on the side of a busy highway, with the doors left wide open, possibly even with the engine running. Alarmed, I looked to the left and saw a few people (ostensibly the car's former occupants) some distance away in the adjoining bush, but they weren't displaying the body language of a group in the middle of a personal crisis...
As the only South African in our car, I was the only one who noticed the car and, having discussed it with my fellow passengers, the only one who regarded that as a highly risky thing to do, whether or not the keys were left in the car.
Given our crime statistics...
Very few South African motorists would choose to stop and leave their cars unattended, let alone with the doors open, on the side of a highway. And if we did, that would certainly be considered grossly negligent by a motor insurer.
Which brings me to the story of a South African named "Mr J".
Having driven his girlfriend's car to a shop one evening, to buy them cooldrinks and cigarettes, he left the keys in the ignition, and the car unlocked, while he went into the shop, despite the car being parked in a spot where Mr J couldn't keep an eye on it. He would later tell the insurer of the car that he thought it was okay to do that, because he only intended to buy those two items, so he knew he wouldn't be away from the car for very long. But, alas, while he was in the shop, he heard the car being started. He ran out, but it was too late - he could do nothing to prevent the thief from driving off in it.
Mr J had been "grossly negligent"
Unsurprisingly, Ms S's insurer, RMB Structured Insurance, rejected the claim on the grounds that Mr J had been "grossly negligent." Ms S argued that while he may have been negligent, that didn't mean she, the policyholder, was negligent. But the insurer wouldn't budge.
Unhappy at having to bear the financial loss of her car, Ms S lodged a complaint with the Ombudsman for Short-Term insurance. Unfortunately for her, her insurance contract contains a paragraph that reads: "We do not pay.if the loss was caused or contributed to by any grossly negligent, illegal, criminal or fraudulent act by you, a family member or a nominated driver at the time of or just prior to the loss."
Mr J was a nominated driver on his girlfriend's policy (alas, that's probably no longer the case). "Mr J was clearly grossly negligent, as a reasonable person would have foreseen the possibility of the vehicle being stolen under these circumstances and would have taken steps to prevent the loss," the Ombudsman found.
And so the rejection of the claim was upheld.
High risk? Says who?
A case I investigated about 18 months ago also hinged on the question of driver negligence. A young woman had an accident in her car, and in terms of her insurance policy, the insurer covered the cost a rental car for her use while hers was being repaired. Wanting to support her sister, who'd just had a baby, she parked it overnight in the street outside the sister's flat in a fairly upmarket Durban suburb – along with others – as she'd done with her own car several times before, without incident.
The next morning the rented Polo was gone.
And to cut a long story short, the rental company, which "self-insures", held her responsible not for the R3 000 excess, as she was expecting, but for the full cost of replacing the car (R120 000) on the grounds that she'd been negligent to park the car in the street of that "high risk" area overnight. As a Durban resident, the rental company argued, she ought to have been aware that it was a high-risk area.
That's when she approached me for help. "I am a part-time student and I honestly cannot afford to pay this huge amount," she said. Few would.
With any contract, disclosure is key.
So while it may not be necessary to warn someone, particularly a South African, not to leave their car unlocked and unattended with the keys in the ignition, in this young woman's case, if parking the locked rental car in a fairly upmarket residential street overnight was regarded as negligent, and would leave her having to pay for the full value of the car if it was stolen, this ought to have been spelt out to her upfront.
But it wasn't.
I questioned company's description of the area in question (Morningside) as high risk. Is there any street in any South African residential area that's not considered to be a "high risk" area for car theft these days? A spokesman claimed that the fact that the woman had admitted that she had checked on the car at 3 that morning was evidence of her own concern for the car's security. That was clearly an over-reach. "I did not wake up at 3am to check on the car," she told me, "but to help my sister with the baby.
"I was pacing in the lounge with him, trying to burp him, and I could see the car in the road below," she said. "I mentioned that in my report in order to give some indication of when the car was stolen."
What if it was parked outside a nightclub?
I asked the company if the woman would also have been considered to have been negligent if she had parked that rental car outside a nightclub while she partied into the early hours of the morning. Her response: "We look at each case on its own merit." For me the crux of that case was that most people would interpret their responsibility to "secure" a hired vehicle as needing to ensure that it was locked.
"Only at a stretch could parking when and how she did be regarded as negligent behaviour, certainly in the absence of any specific written or verbal instruction that the car was not to be left overnight on any public street," I argued.
Happily, the rental company did an about-turn, deciding to absorb the loss of that Polo, rather than requiring the woman to pay the R121 000. She had to pay only the R3 000 waiver amount.
The bottom line is that sometimes driver behaviour is clearly negligent, not to mention stupid, but other times it's worth challenging that assertion, given the full context of the incident in question.
Any views or opinions expressed in this article are solely those of the author and do not represent those of Cars.co.za or its editorial content team.