There are many discussions and debate around the Rues of the Road in gated communities and estates. An important decision from the Ombudsman has been made with regards to road crashes on roads in these complexes and estates and the policy wordings applicable to damage suffered on roads in these areas!
Facts:
Ms. Z submitted a claim to her insurer following a motor vehicle accident. The accident occurred whilst Ms. Z was driving in her residential complex. Ms. Z claim was rejected on the basis that she was driving on a non-public road and therefore did not enjoy cover under the policy for the loss. In support of its rejection, the insurer relied on the following provisions of the policy:
(1) “Motor vehicle accident” means the unintended collision of one motor vehicle with another motor vehicle, a stationary object or person, resulting in damage to the vehicle and which occurs on a public road as defined in the National Road Traffic Act, 1996 (as amended).
(2) “Special Provisions” f. The maximum repair contribution available at the time of a claim will be reduced by 50% where the motor vehicle accident or loss takes place on a road that is not cemented or tarred. No benefits shall apply whilst the vehicle is being driven where there is no formally registered road.”
Unhappy with the rejection, Ms. Z approached OSTI for assistance. Ms. Z contends that at sales stage she was not informed that she would not be covered for accidents which occurred on no public roads. She contended further that there were road traffic signs within the complex and that all road regulations applied within the complex. She contended that these roads were therefore recognised as public roads.
In its response to the complaint the insurer contended that the salient features of the policy were brought to Ms. Z’s attention at sales stage. The policy documents were also sent to Ms. Z and she was given a 44 day “cooling off” period within which to review the documents and make further enquiries if necessary. In the absence of any further enquiries or cancellation by Ms. Z within the “cooling off” period, the policy incepted after the first successful debit order on 26 September 2014.
The insurer contended further that the complex where Ms. Z resided had public access control. Members of the public were not permitted to enter without permission from the person residing in the complex who they wish to visit. Thus, according to the insurer, the incident occurred on a non-public road and there was no cover under the policy.
Osti’s Recommendation
Under the policy the insurer was obliged to make a contribution towards the repairs of the vehicle following a “motor vehicle accident which occurs on a public road as defined in the National Road Traffic Act 1996 [as amended]” The National Road Traffic Act defines a public road as “any road, street, throughfare or any other place (whether a throughfare or not) which is commonly used by the public or any section thereof or to which the public or any section thereof has the right of access…” (our emphasis).
The words “or any section thereof” in this instance would include this section/category/ class of the public that live within the complex. Thus the road on which the accident occurred would be considered to be a public road in terms of the National Road Traffic Act notwithstanding that there is no right of general entry and that permission is required in order to enter the complex.
Ms. Z’s claim therefore fell within the ambit of the policy. The policy exclusion relied on by the insurer states that “No benefits shall apply whilst the vehicle is being driven where there is no formally registered road” (our emphasis).
The insurer had not provided any evidence to satisfy its reliance on this exclusion but merely relied on its previous argument that the road is a non-public road. As the insurer bore the onus of justifying reliance on the exclusion it was required to provide evidence showing that the road was not a formally registered one. As it failed to do this, it was not entitled to rely on the exclusion. In any event, and even if the insurer had discharged its onus, OSTI was of the view that it would still not be in a position to justify a finding in favour of the insurer based on the insurers failure to draw Ms. Z’s attention at sales stage to the specific exclusion on which it sought to rely.
This is an unusual term in an insurance policy and as such, more should have been done to bring it to the insured’s attention. The insurer had not demonstrated that it had complied with the Policyholder Protection Rules in relation to disclosures. Rule 4.3.(i) of the Policyholder Protector Rules requires the insurer to furnish the policyholder with certain particulars, prior to entering into a policy which information must be confirmed in writing, within a period of 30 days.
Information to be provided to the policyholder includes a reasonable and general explanation of the principles of the relevant contract and information reasonably expected to enable the policyholder to make an informed decision. More particularly, in terms of Rule 4.3.(i) the policyholder should be furnished with “concise details of any special terms and conditions, exclusions, waiting periods, loadings, penalties, excesses, restrictions or circumstances in which benefits will not be provided.”
is not sufficient to merely to refer to the terms and conditions contained in the policy documents sent to the insured after the contract has been concluded. There must be full and proper compliance with the Policyholder Protection Rules prior to the contract being concluded and which will then enable the insured to exercise an informed choice as to whether or not she/he wishes to agree to the terms offered by the Insurer.
In the circumstances, OSTI recommended that the insurer pay the claim, which it agreed to do.
Rules of the Road and Road Safety within Gated Estates https://t.co/1MgJDYw0DQ #ArriveAlive pic.twitter.com/9x39JFWWg2
— Arrive Alive (@_ArriveAlive) September 24, 2017
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Who should / must enforce traffic safety within gated estates /townhouse complexes?