It’s all about a balance of probabilities

You’ve provided your clients with short-term insurance to cover their most valuable possessions like cell phones, cars or houses. What happens in the unfortunate event that a client submits a claim but, for some or the other reason, you find that you cannot honour the claim? Your client may turn to the Ombudsman for Short-Term Insurance, or OSTI.

Understanding OSTI’s role in resolving disputes is essential to developing a better working relationship between the ombudsman, policyholders and insurers. So, who is OSTI? OSTI is an independent, non-profit industry ombud scheme that provides “the insuring public and the short-term industry with a free, efficient and fair dispute resolution mechanism through and alternative dispute resolution process, applying the law and principles of fairness and equity.” (www.osti.co.za/about/, 22/10/2021.)

OSTI is not, however, a court of law. It evaluates all relevant information and evidence, and then offers recommendations based on the legal position and principles of fairness and equality. Amid a possible increase in disputes resulting from the current pandemic, OSTI recently published an article that discusses its independent and impartial role. “OSTI remains an independent organisation. It continues to deliver fair and just outcomes,” wrote Haroon Laher, chairman of the board. “The general expectation of almost every complainant in our office is that because they are paying their premiums, their claims, which are true and honest, should be honoured by the insurers.” Unfortunately not all claims are as “true and honest” as they may at first appear.

Should a dispute escalate and either of the parties involved ask OSTI to step in, the insured, insurer and OSTI have specific roles and responsibilities.

What is the insured (claimant’s) role?

• The insured must be able to demonstrate that they have a valid claim in terms of the insurance policy.
• The insured cannot simply allege the claim – they must be able to prove the claim by presenting substantive evidence of the matter.
• The onus to provide OSTI with sufficient evidence in support of their claim lies with the insured.

What is the insurer’s role?

• The insurer is required to provide evidence in support of its stance and defences on each matter.
• Where the insurer avoids liability due to an exclusion or exception in the policy, it is the insurer’s responsibility to prove such exclusion or exception.
• The insurer should offer its full cooperation to ensure that complaints against it are resolved in good time.

What is OSTI’s role?

• OSTI cannot give legal advice regarding a specific complaint to either party, as this will compromise its ability to act independently in resolving the dispute.
• Recommended resolutions are determined by weighing the versions of events on a balancing scale of fairness, reasonableness and human experience, to establish what is more likely or probable.
• This practice is called deciding a case on a balance of probabilities, and refers to the standard test used when deciding civil disputes.

To put it very simply, OSTI gives both parties a chance to present their case before considering its recommendations. This aims to ensure fair resolutions without an escalation in conflict.

We know that you are committed to honouring your clients’ policies and making the claiming procedure as smooth and easy as possible. Contact us should you have any queries on claims that you suspect may be fraudulent, or for more information on OSTI.