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Reckless driving may crash your client’s claim

Your client’s claim may be rejected if they were speeding

Your clients’ responsibility in protecting their valuable vehicular assets does not end in getting it covered. Drivers must also take ‘reasonable precautions’ to prevent accidents, which includes sticking to the speed limit. Read on (internal document link) to find out why the Ombudsman for Short-Term Insurance (OSTI) is warning insured parties of a rise in the rejections of car insurance accident claims.

OSTI’s complaint trends reports of November 2021 reflected a marked increase in insurers rejecting motor vehicle accident claims. These rejections were based on the insured breaching a contractual clause that places the responsibility of taking reasonable care and precautions to prevent or minimise liability, damage, injury or death on the motorist.

While this clause may be invoked for a number of reasons, the most prevalent motivation for claims rejections is that the vehicle was traveling above the speed limit at the time of the accident. The onus to prove that the driver was driving too fast rests on the insurer, who makes use of data taken from onboard tracking reports and accident reconstruction experts to inform their decisions.

When a claim is rejected and the insured lodges a dispute with OSTI, the ombudsman will first investigate the provided evidence of speeding to determine if it is reliable. OSTI has kindly provided two case studies to illustrate different outcomes of claims disputes of this nature.

CASE STUDY A – OSTI finds for the insured.

After concluding that the evidence submitted by an accident reconstruction expert was inaccurate, OSTI ordered an insurer to pay an initially rejected claim. “The expert, in that case, did not consider objective evidence at the accident scene, and there were substantial inconsistencies in the measurements that he had used to calculate the speed,” OSTI said.

Vehicle tracking reports and data from onboard computers that indicate the vehicle’s speed at the time of the accident are accepted in most cases. The claim may however not be rejected by default if this confirms that the motorist was speeding. “An insurance policy may not, by default, exclude liability because the insured was negligent,” OSTI said. As OSTI holds that speeding on its own does not necessarily indicate recklessness, the insurer must still prove that the insured was not simply being negligent, but also driving recklessly.

What this means, is that the insurer must prove that the insured could have anticipated the possibility of an accident and did not take reasonable precautions to avoid it. Claimants are not likely to admit to recklessness, but this can be determined by something called inferential reasoning – as in the next case.

CASE STUDY B – OSTI upholds the rejection

In this case, a driver hit a tree while travelling at 104kmph in a 60kmph zone. The driver claimed that visibility was poor as streetlights were not working and that he was unfamiliar with the road. He did not notice an upcoming intersection and, when a vehicle suddenly approached from the side, he had to take evasive action, ultimately losing control of his vehicle and colliding with the tree.

OSTI found that as the driver was unfamiliar with the road by his own admission, and visibility was poor, he should have reduced his speed and been on an increased lookout for obstacles or a sudden change in circumstances. These are all reasonable measures the driver should have taken to avoid the accident. It did not help the claimant’s case that a speed limit sign was placed in full view ahead of the intersection.

OSTI found that the traveling speed was accurately calculated by the insurer’s accident reconstruction expert and that the insured’s conduct should be considered as reckless. “As a matter of probability, the insured’s conduct was also found to be the cause of the accident because, had he observed the regulated speed, he would have been in a better position to see the intersection, stop and safely execute the turn,” the OSTI said.

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