SA Insurance Warning to Drivers: Penalty for Speed is Denied Claims from Speedsters
“Worse still, when speeding is found to be the cause of an accident, insurers often invoke the ‘due care’ exclusion to reject claims outright.
South Africa carries a grim badge of dishonour: the highest annual road death toll on the African continent. At the centre of this crisis is speeding, a reckless reflex that steals reaction time, magnifies the carnage of crashes, and leaves drivers paying long after the wreckage is cleared.
Edite Teixeira-Mckinon, Lead Ombud of the Non-life Insurance Division at the National Financial Ombud Scheme South Africa (NFO) warns that every collision drives repair costs higher, with insurers inevitably passing the burden on through rising premiums.
“Worse still, when speeding is found to be the cause of an accident, insurers often invoke the ‘due care’ exclusion to reject claims outright. This clause requires policyholders to act reasonably to prevent losses and damage. Yet this exclusion clause is not always correctly applied,” she said.
When speed meets exclusion
In one recent case, a driver said he swerved to avoid a pothole, lost control on a bend, and mounted the pavement. The claim was rejected on the grounds of the following policy exclusion: “You have a duty to take reasonable care to prevent or reduce loss, damage, bodily injury, liability and accidents as if you did not have insurance.”
An accident reconstruction expert found no pothole but calculated that the vehicle accelerated from 61km/h to 71km/h while executing the bend, which was above the critical speed of the curve. The insurer argued this proved recklessness.
Teixeira-Mckinon’s office disagreed and pointed out that the policy covered negligent driving. To prove recklessness, the insurer had to show the driver deliberately or intentionally caused the accident, in other words, that the driver foresaw the possibility of losing control of the vehicle whilst executing the bend at 71km/h and that he recklessly reconciled himself with this possibility.
Speed alone, she argued, does not equate to recklessness. Eleven kilometres above the speed limit amounted to negligence, not recklessness. The insurer was advised to settle the claim and did.
The 20km/h rule
Some policies, however, go further, excluding cover when a driver exceeds the speed limit by more than 20km/h. Unlike the broad “due care” clause that is more common in short-term insurance policies, this exclusion must be specifically highlighted to policyholders before inception.
A driver travelling at 114km/h in a 60km/h zone saw his claim rejected. The insurer cited the “more than 20km/h” policy exclusion to reject the claim. The insurer relied on the data retrieved from the vehicle’s tracking device. The complainant denied driving 20km/h over the speed limit and disputed the reliability of the tracking data; however, no evidence was provided to dispute the tracking data.
The complainant could not recall how the accident took place and he speculated that he lost control of the vehicle when he swerved to avoid an object on the road.
It was pointed out to the complainant that to rely on this rejection reason, the insurer needed to only demonstrate what the speed limit on the road was and that the complainant exceeded the speed limit by more than 20km/h.
Considering the speed limit on the road and the speed at which the complainant had travelled prior to the accident, the Non-life Insurance Division was satisfied that the insurer had discharged its onus in respect of the rejection reason.
©Higher Education Media Services.