Failure to Disclose: Can Insurers Reject Your Claim?

By Garry Hertzberg and Natasha Sonblo of hersalaw.co.za

Picture this: you file an insurance claim, only to have it rejected because the insurer claims you didn’t disclose some information when you took out the policy. Is that fair? Can they just refuse to pay up especially when you are up to date with your monthly premiums?

The answer lies in the Short-Term Insurance Act. Section 1 makes it clear that your policy cannot simply be invalidated due to non-disclosure or misrepresentation unless that information would have materially affected the insurer’s assessment of the risk. In plain English, if a reasonable person would’ve thought it was important enough to share, then the insurer has a point.

But hold on! Our courts have ruled that just because something wasn’t disclosed doesn’t automatically give the insurer the right to reject your claim. The insurance company has the burden of proving that the missing info was crucial enough to make a difference. So, before your claim is thrown out, they need to show it really mattered.

The next time your insurer tries to pull the “non-disclosure” card, don’t just accept it – make sure they can back it up.