Ensure that the correct details of the Regular Driver appears on the Car Insurance Policy!

The insured submitted a claim to the insurer for a stolen vehicle. The policy incepted on 11 March 2020, when the incident vehicle was placed on the cover. The theft of the vehicle took place on 1 October 2020. The sale of the policy was conducted with the insured’s wife, who noted herself as the regular driver of the vehicle.

The Claim

When the claim was submitted, the insured’s daughter-in-law, Mrs. B, advised that the vehicle had been stolen from behind a mall. She stated that the insured’s son, Mr. B, was the last person to drive the vehicle. He was working on a construction site near the mall.

Mr. B was also present when the claim was submitted to the insurer. They both informed the insurer that he was the regular driver of the vehicle, and that the vehicle was kept at their residence in Johannesburg. Mrs. B stated that Mr. B also used the vehicle to transport workers to a construction site.

The insurer rejected the claim

The insurer rejected the claim and voided the policy. It argued that the details of the regular driver were misrepresented when the policy was sold. In this regard, the terms and conditions of the policy are provided as follows:

WHAT MUST I REMEMBER?

Misrepresentation, Misdescription or Non-disclosure

• I must ensure that all the information supplied by me, or anyone acting on my behalf, is correct and complete as any incorrect information may affect the validity of my contract or prejudice any claim I might have under this policy.
• If I misrepresent, incorrectly describe or fail to tell the insurer of any important fact or circumstances relating to this policy, my policy may be cancelled or invalidated from the start date and any claim under this policy will not be paid.
• Where the policy is invalidated (voided) from the start, all premiums received by the insurer less any cost incurred by the insurer will be refunded.

According to the insurer, Mr. B advised the claims assessor that the insured’s wife lived in Cape Town when the vehicle was added to the policy. The insurer said that Mr. B advised that, whilst in Johannesburg, the insured’s wife had only driven the vehicle to the shops on a few occasions.

The insurer also advised that the insured’s wife was interviewed by the assessor. She confirmed that she lived in Cape Town from the beginning of 2020 and that the vehicle was kept in Johannesburg. She also stated that everyone who had access to the vehicle would drive it.

When she was advised that her son, Mr. B, had informed the assessor that he was the regular driver, she confirmed that they took turns driving the vehicle. The insurer further established that Mr B. was noted as the regular driver of the vehicle on a previous policy.

The insurer advised that the premium would have increased had it been informed that Mr. B was the regular driver. It submitted that it suffered a 10.03% premium prejudice.

The following information was provided by Mr. B and Mrs. B:

• The incident vehicle was purchased in November 2018 and the insured was the registered owner.
• The vehicle was on cover with a different insurer during 2019 and Mr. B was noted as the regular driver. He was unemployed during this period.
• In October/November 2019, the insured and his wife had travelled to Dubai.
• In January 2020, Mr. B was employed by a construction company, and it provided him with a company vehicle, which he drove.
The construction company confirmed this arrangement.
• In March 2020, the insured and his wife returned from Dubai and went directly to Cape Town. As they were both retired, they planned to spend a lot of time with Mr. B and his family in Johannesburg and wanted to have the vehicle available for them to use.
• On 11 March 2020, the vehicle was placed on the policy and the insured’s wife stated that she would be the regular driver. On 26 March 2020, the country went into lockdown. Due to the lockdown, the insured and his wife could not travel to Johannesburg as planned.
• From March 2020 to June 2020, the vehicle remained stationary in Johannesburg.
• In June 2020, the insured and his wife travelled to Johannesburg and stayed until mid-September, when they flew back to Cape Town. During their stay in Johannesburg, the insured’s wife drove
the vehicle to go to the shops, to pick up her grandchildren from school, and to visit family and friends.
• Thereafter, Mr. B started using the vehicle because the company vehicle was being repaired.

OSTI’s findings

The issue in dispute was whether the insured’s wife’s response during the sales conversation, by nominating herself as the regular driver, amounted to a deliberate misrepresentation in order to obtain a lower premium. The onus of proof in this regard lay with the insurer.

OSTI considered the evidence on which the insurer relied to substantiate its assertion that there had been a misrepresentation of the details of the regular driver during the sales conversation and stated the following:

• The insurer did not provide any evidence to contest Mrs. B’s statement that the vehicle was stationary in Johannesburg from March to June 2020. Therefore, it had not been proven that the insured’s wife was not the regular driver at the inception of the policy.

• OSTI stated that, the fact that Mr. B was noted as the regular driver of the vehicle on a previous policy, did not necessarily mean that he was the regular driver of the vehicle at the inception of this policy.

• OSTI considered the sequence of events that took place from the time that the insured and his wife returned to South Africa, the imposition of the nationwide lockdown, and the date that Mr. B began his employment with the construction company.

OSTI held that the insurer had not demonstrated that the insured misrepresented the details of the regular driver when the policy was taken out in March 2020. It determined that Mr. B became the regular driver around July 2020, after the policy had incepted.

Therefore, it recommended that the claim be settled proportionally based on the premium prejudice suffered by the insurer on Mr. B’s risk profile as the regular driver. The insurer agreed to comply with OSTI’s recommendation and settled the claim proportionally