OPINION | Insurance 101: Why claims may be rejected, and what you can do about it

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Folder with close up on the word claims and a note where it is written under investigation. Concept of insurance fraud, 3d Illustration
Folder with close up on the word claims and a note where it is written under investigation. Concept of insurance fraud, 3d Illustration

With Covid-19 hitting most pockets, it's not just businesses filing insurance claims. Karabo Kopeka explains some of the actions policyholders can take to reduce the chances of their claims being rejected or their policies cancelled. 


With the effects of the Covid-19 pandemic and the national lockdown being felt far and wide, 2020 has been a year characterised by financial hardship for many. 

During tough times, insurance offers a level of financial security designed to mitigate the impact of unforeseen events,  reducing any further threats to already strained bank accounts. But an insurance policy is a two-way agreement between policyholder and provider that requires a level of transparency to remain valid. 

A number of factors could result in a claim being denied, or, in a worst-case scenario, in a policy being voided or cancelled. 

Claim rejection

Non-payment essentially constitutes a breach of contract if not paid within the period of grace and this may lead to a claim being rejected.

Lack of disclosure or altered risk behaviour is another reason that may result in the rejection of a claim. For instance, you choose to upgrade your car and pass on your existing one to your child, only to have it involved in an accident. In circumstances where the incorrect person was noted as the regular driver, claims are often rejected, given the fact that the person behind the wheel is not noted as the car’s ‘regular driver’. As such, it is vital that you keep your insurer up to date with any risk altering life changes, as these could have a significant impact on the claims process at a later stage.

Claims can also be rejected based on a lack of adherence to the terms of the contract with your insurer. For instance, certain policies require specific types of vehicle trackers to be installed – given that different models are designed to track different varying elements like impact or speed. Avoid cutting corners – it could cost you dearly in future.

Cancellation vs. Voidance - what’s the difference?

Policy cancellations are not something that insurers take lightly. Cancellation of a policy is something that happens rarely and is typically the result of a falsified claim – for example someone who deliberately stages a hijacking or robbery so as to claim an insurance pay-out. In serious cases such as this, the policy may be cancelled due to breach of trust, something that can have a serious impact on any future insurance policies, as it constitutes part of one’s permanent record.

In less drastic cases – for instance when claims are made either due to recklessness or lack of disclosure regarding previous losses, cancellations or certain risk altering circumstances – a contract might be voided. In this case, the policy would simply cease to exist and the insurer would refund premiums paid. In such instances, one’s insurance profile would be adversely impacted.

Refuting a decision

If you’ve had your policy cancelled or claim rejected and feel that the decision on the part of the insurer was unfair, there are various avenues you can explore to dispute the outcome. Insurers have a vested interest in treating clients fairly, and as such, your first port of call should be the insurer’s own dispute resolution team.

Should the matter remain unresolved, you should then approach the Ombud for Short-term Insurance, who will offer an objective and specialised assessment of your case and provide adequate resolution if merited.

Karabo Kopeka is Head of Claims at MiWay, a licensed non-life insurer and Financial Services Provide. Views expressed are her own.

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