An insurance company has been ordered to pay a client more than R786,000 after it failed to inform her of a new tracking device requirement, resulting in the rejection of her valid claim for the theft of her motor vehicle.
Theresa Ralph took Efficient Insure Advisory Services to the office of the ombud for financial services providers after her theft claim was rejected by the company on the basis that she failed to add a tracking device to the Toyota Prado she bought in December 2021.
The car was not deemed high risk for theft at the time, but it was stolen in November 2023 during an armed robbery.
In their defence, the insurance company said that in April 2023, it imposed a new tracking requirement for Ralph’s vehicle and that on April 28 2023, an email was sent to her work email address regarding the requirement. This was followed by other emails in May and August 2023 to remind her about the change.
Ralph said she had not seen the emails. The company said it could not be held responsible for a third party blocking or hindering their communication with Ralph, who should have reasonably checked for important communication that is auto-spammed and resolved the issue with her employer.
According to the ombudsman’s ruling, the insurer confirmed that their bulk email communication is designed to create an audit trail that would alert them if an email was not delivered.
“There are two stages of sending an email in terms of Section 23(a) of the ECTA [Electronic Communications and Transactions Act]; at the first stage, the email is composed and sent by the originator [sender]. At stage two, the email enters the addressee’s system, beyond the sender’s control,” said adjudicator John Simpson in his ruling.
There are two stages of sending an email in terms of Section 23(a) of the ECTA [Electronic Communications and Transactions Act]; at the first stage, the email is composed and sent by the originator [sender].
— Adjudicator John Simpson
“A ‘sent report’ [system-generated confirmation] shows the email left the sender’s system and entered the electronic highway towards the recipient. This satisfies the legal requirement that the email is out of the sender’s control. Once the ‘sent report’ is generated, the sender has fulfilled their duty, and this is accepted as evidence of successful transmission [at stage one],” said Simpson.
The complainant tried to obtain evidence from her employer that the emails were never received, but her employer required a court order to provide the evidence.
Based on the submissions made, the ombudsman required the insurer to provide specific audit trails of the emails sent.
The company sent copious documents and emails in response, but none of them contained any evidence of an audit trail to show that the emails were sent.
“The respondent [the insurance company] is the expert in the field and is expected to provide all the information and assistance necessary to ensure that the complainant is well advised and informed regarding a new special condition, such as a tracking device,” said Simpson.
“It will then be reasonably expected that the complainant will follow up to check whether she was aware of the requirement and whether the device was installed ... The respondent’s actions in this matter do not display the skill, care and diligence required.”
He ordered the insurer to pay Ralph R786,300 with interest of 11.25% per annum from the date of the order to the date of final payment.
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