Tuesday, February 3, 2009

Motor Vehicle Insurance Policy exclusions


It is customary for comprehensive motor vehicle insurance policies to provide cover for claims by third parties against the driver of the vehicle. Most policies also exclude claims against the driver by members of the driver's family or people normally residing at the driver's residence.

In a recent court case, Bezuidenhout v ABSA Insurance Brokers (TPD 40688/2000), the court was asked to rule on whether the injured passenger (who was trying to claim on the driver's policy) normally resided at the driver's residence.

The passenger and the driver had been living together in a permanent relationship in various residences, but in 1998, their relationship ended. However, the driver allowed the passenger to continue to live in a house rented by the driver.

The passenger argued that, because the driver did not own the house, the exclusion phrase in the policy reading "....excluding any person who normally resides at your residence" meant that the exclusion did not apply.

The court held that the phrase "your residence" meant the insured driver's domestic establishment, and that persons normally residing there would be those who occupy or dwell there, with some degree of continuity, and normally received their meals and accommodation from the insured gratuitously, irrespective of whether the insured was the owner or a lessee of the premises.

While it is good to have legal certainty about the meaning of certain exclusion clauses in a policy, the hard reality is that family members and those who normally reside at the insured driver's residence are not usually covered in comprehensive motor insurance policies.

Such family members need to be covered under medical schemes and under long term risk assurance policies.

Clive Hill
Financial Services Manager

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1 comment:

Aaran Macsneps said...

Some insurers have a team held workshops that will give you a courtesy car if you must be available. Some insurers have a system of cars added to their policies when they reserve a car for you to partner rental vehicles chosen. But most insurance companies do not have one of these options.

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