Osti (Office of Short Term Insurance) & Old Mutual Final Letter.

Dear Sir/Madam, Insurer : Old Mutual Insure Ltd Policy/Claim number : 103958 / 860801 Our reference : A1**/19 We enclose correspondence from the insurer received on 1 November 2019 for the insured's records. The dispute in this matter relates to a claim for a motor vehicle accident that was rejected by the insurer on the following grounds:  Materially exceeding local and provincial speed limits  Gross negligence  Due care and precaution The insurer advises that during the validation of the claim, the insured stated that he was on his way home from work prior to the accident. His shift ended at 05:00 am. Whilst travelling on a two way road with single lanes in each direction, an oncoming vehicle came into his lane at a high speed. The insured swerved left in order to avoid a collision with the third party vehicle but he subsequently collided with the pavement. The insured advised that he swerved left after a bend in the road. He also mentioned travelling over a speed bump shortly before the accident. The insured alleges that he was travelling between 50 and 60 km/h prior to the accident. An accident reconstruction expert appointed by the insurer reported that there was no speed bump in the immediate vicinity of the collision and that the insured would have had a long line of sight of any approaching vehicles. According to the reconstruction expert, the version of events as described by the insured does not correspond to the physical evidence on the scene. A more likely scenario is that the vehicle left the road beyond the bend, striking the western kerb with the right front wheel. This caused the vehicle to vault and land on the trailing edge of the guttering of the turret. The furrows seen in the ground was probably caused by the left side wheels digging into the soil, which would also explain the severe negative camber of the left side wheels. The reconstruction expert determined that the vehicle was travelling at approximately 77 km/h prior to the accident in a 60 km/h zone. We have reviewed the submissions made by both parties and find that the insurer has made out a case on a balance of probabilities on which to reject the claim. The insurer has provided expert evidence showing that the accident could not have occurred as described by the insured who, by his own admission, has a fragmented memory of the accident and cannot recall the events clearly. While the insured appears to be disputing the expert's evidence, he has not put forward any expert evidence of his own to refute the expert's findings. The insured has asked questions about the manner in which the evidence was collected presumably for the purposes of challenging the expert's conclusions. We note that the insurer has not addressed these questions in its response. Nevertheless, we believe that we are in a position to make a finding based on the information available. The expert's conclusions are drawn based on the evidence at the scene, the damage to the vehicle and the physical aspects of the scene. On the face of it the expert has provided evidence to substantiate the conclusions reached and puts forward a more probable version of the accident than the insured's fragmented version. The insured has not put forward any evidence to support his version that he was travelling between 50 and 60 km/h. Should the insured wish to dispute the investigator’s calculations further then the best forum in which to do so would be a court of law where both parties can provide expert evidence and the evidence can be tested under cross examination. Unfortunately, this office does not have jurisdiction to conduct such hearings. We take of the insured's submission that he swerved to avoid an oncoming third party vehicle that was travelling in his lane. It is not the alleged avoidance of a potential collision with a third party that is regarded as grossly negligent but rather, the election to travel at a speed which materially exceeded the speed limit thereby contributing to the collision and the damage caused. With regards to the rejection based on due care and precaution. The classic case which guides us when dealing with this provision in insurance policies, is Santam v Design cc, 1999. The court found that in order to take advantage of the reasonable precautions clause, the insurer needed to prove that the insured acted recklessly. The court said that it was not enough that the insured’s failure to take any particular precautions to avoid a loss should be negligent but that it had to be at least reckless, in other words made with the actual recognition by the insured himself that a danger existed and regardless of whether or not it was averted. In the recent case of Renasa v Watson, 2018, the court also interpreted the reasonable precautions clause and found that the bar was set too high in Santam v cc Design. The court held that at the very least, proof of foreseeability is required. This would require proof that a reasonable person in the position of the insured would have foreseen the reasonable possibility of the loss occurring and would therefore have taken reasonable steps to prevent it. Having regard to the circumstances of the loss and the insured’s surroundings, the road on which the insured was travelling was curvy, it was dark and there was minimal light, the high speed at which the insured was travelling can be considered to be grossly negligent. A reasonable person would have foreseen that exceeding the speed limit may result in loss of control of the vehicle, reduce reaction time and the ability to stop the vehicle timeously in an emergency situation. The insured failed to take reasonable precautions to prevent the loss by failing to adhere to the speed limit. In the circumstances, the insurer’s rejection of the claim is upheld. As we cannot take the matter any further, our file will be closed. The decision reached by this office is not binding on the insured and should the insured wish to do so, he is at liberty to pursue the matter further through litigation. Should the insured wish to pursue this matter further against the insurer, he is advised to consult with an attorney without delay and to give instructions to his attorney to proceed with the issuing of summons. We again draw the insured’s attention to the provisions of the time bar clause in the policy. The time-bar clause governs the period of time in which legal proceedings may be instituted against the insurer to challenge the rejection of a claim and the consequences of summons not being issued timeously. In terms of our mandate, the operation of time-barring clauses in policies, where the insurer is a member of the Ombudsman Scheme, is suspended once the complaint has been formally registered in our office until 30 days after the closure of our file. Therefore, if we are unable to make a finding in the insured’s favour, any rights to take legal action are to that extent preserved. This means that 30 days after the matter has been closed, the time-barring provision contained in the policy will start to run from where it left off on the date that the complaint was registered. Yours faithfully, Nadia Gamieldien OSTI Staff.