The answer to this question will come down to the basics of finding the facts and the contents of the policy contract between insurer and insured. This question was raised in a matter referred to the Ombudsman for short term insurance, and we would like to share this interesting example:
On 4 September 2003, the insured was involved in a collision. 10 days later she was informed that an assessor had been instructed to assess the damages. The vehicle was at her home, but she was told to arrange for it to be taken one of the insurer’s preferred panel beaters and the insurer also confirmed to her that the towing costs would be paid.
Three days later she received a phone call from the insurer informing her that her claim had been rejected because of her failure to pay the premium payment falling due on 1 September 2003. A week later she went to collect the vehicle, and to recover it she was charged R1 880 release fees and a further amount of R250 to tow the vehicle back to her premises.
Decision by the Ombudsman
The Ombudsman agreed with the insurer that it was entitled to reject the claim based on the non-payment of the premium. In view of the undertaking which the insurer had given to the insured with regard to the towing charges however, the insurer was ultimately persuaded to make payment of the full amount of R2 130.
[Source: Ombudsman Newsletter: 04/04]
Advice to the insured car owner
The above example provides important lessons to the vehicle owner. We would like to provide a few suggestions to our vehicle owners:
- Towing and storage will incur costs – and someone has to foot the bill to compensate for these costs!
- Avoid assumptions with regards to financial liability.
- Always refer to the insurance policy and stipulations pertaining to towing and storage.
- When in doubt, contact the insurer and ask for written confirmation whether they will be responsible for payment of these costs.
- Keep correspondence of all communications in a safe place with your policy documentation.