The Office of Ombudsman for short and long-term insurance has received its highest number of complaints in its history. The office recorded more than 17 000 cases related to insurance disputes in 2021.
This is a 22 % increase from the previous year. The Ombudsman says almost half of these cases involve motor vehicle insurance.
The Office of Ombudsman for short and long-term insurance released its annual report on Tuesday.
The insurance ombudsman says the COVID-19 pandemic had a significant impact on the number of insurance claims received by the office. It says more than 6 000 cases received were referrals from insurance companies.
The ombudsman says that while the COVID-19 pandemic played a role in the increase in insurance claims, the July unrest also had an impact in pushing up the cases.
“SASRIA complaints were registered by the office following the civil unrest, the looting and damage to infrastructure mainly in provinces of KwaZulu-Natal and Gauteng in July, 23 of these related to commercial insurance and eight to personal life insurance,” says the deputy ombudsman for short-term insurance, Edite Teixera-McKinon.
SASRIA recorded losses due to the July unrest:
The office says it has resolved over 10 000 complaints last year, resulting in a monetary value of R197 million. R97 million of this relates to the COVID-19 business interruption complaints that were settled by insurers.
“54% of all the complaints were resolved within four months, 16% were between 4-6 months and 30% were resolved in around six months. The majority of cases where the office overturned the insurance decision or stance were resolved by the parties through conciliation without the office having to issue a formal decision or a recommendation. This is testament to the level of co-operation received by the office from the industry.”
The ombudsman says they have also noticed a trend in motor vehicle insurance complaints in the past three years. It says 43% of the overall complaints received by the office in 2021 relate to motor vehicle insurance disputes. It also notes that theft and hi-jack rank third in this category.
“In 2019 motor vehicle insurance complaints to the office comprised 49% of all the complaints to the office, this dropped to 36% in 2020 as a direct result of the government posed COVID-19 lockdown regulation with less vehicles on the road and then last year this increased again back to in the 40s, this time 43% so not quite a pre-COVID levels but getting there.”
The insurance ombudsman says load shedding is becoming more prevalent, it urges clients to seek a cover that ensures their belongings are adequately covered in case of damage due to rolling blackouts.
It says insurers are less likely to offer this type of cover in a normal comprehensive insurance cover.
The ombudsman encourages policyholders to always check their policy wording and contracts to see if they are covered for such damages.
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