In the recent case of
Mavela v Outsurance Insurance Company Limited,[1] the High Court (Free State Division, Bloemfontein) considered an insurer's right to reject a claim where the insured misrepresented facts and/or failed to provide accurate and complete information.
Mr Mavela (the plaintiff) submitted a claim to his insurer, Outsurance (the defendant), after his Toyota Fortuner was written off following a collision. The defendant rejected the claim on two grounds:
The plaintiff had allegedly provided false, incomplete and/or misleading information about the incident, including his conduct before and after the collision; and
The plaintiff was allegedly under the influence of alcohol at the time of the collision.
The rejection of the claim was based on the plaintiff's policy obligations, which included a duty to provide true and complete information to both the defendant and the relevant authorities. The insurer relies on accuracy of the information provided by insured persons, and any information that is misleading, incorrect, or false will likely prejudice the claims process.
The plaintiff challenged the defendant's decision to reject the claim. The court considered various evidence regarding the collision and statements made by the plaintiff and witnesses.
There were several contradictory statements, including whether the plaintiff was intoxicated, whether he saw another vehicle prior to the collision, and how the collision occurred.
The plaintiff denied being intoxicated and claimed he was unaware of the presence of alcohol bottles in his vehicle. However, the court found that he had offered conflicting versions of events regarding his consumption of alcohol.
Based on the totality of the evidence, including significant inconsistencies and improbabilities in the plaintiff's account, the court found that the defendant had proven that the plaintiff breached his policy conditions by persistently providing false information. This information was material to the assessment of the claim.
The court described the plaintiff's version as “illogical and nonsensical," while accepting the insurer's version as credible and probable.
It further held that, even apart from the intoxication allegation, the plaintiff's failure to provide truthful information constituted a material breach of the policy. His claim was dismissed with costs on both grounds.
This judgment highlights the importance of honesty and accurate disclosure in insurance claims. Misstatements, misrepresentation, and dishonesty can lead to the rejection of a claim. It serves as a reminder that insurers are entitled to strictly enforce policy terms, and that non-compliance, whether through misrepresentation or breach, can have serious consequences for policyholders. If this judgment resonates with any matters you're currently advising on or assessing, our team at Webber Wentzel is available to provide guidance and legal support.
