To be on the safe side, alert your broker or insurer so they can make a note on your policy profile to avoid any dispute should a claim arise. Image: Shutterstock

CRA Insurance News – South Africa

By Roy Cokayne

Lockdown complication: Industry body says decisions will be based on the merit of each claim.

Many motorists are concerned about the insurance implications of being involved in an accident or insured incident while driving with an expired driver’s licence, because the Covid-19 lockdown has made it impossible for them to renew their licence.

Directions published by Minister of Transport Fikile Mbalula on May 20, in terms of the Disaster Management Act, extended the validity period of some driver’s licences.

It said: All learner’s licences, driving licences, temporary driver’s licences, motor vehicle licence discs, temporary permits, roadworthy certificates and professional driving permits that expired in the period from March 26, 2020, up to and including May 31, 2020, are deemed to be valid and their validity period is further extended by 90 days from June 1, 2020.”

However, it will have been impossible for any motorist whose driver’s licence expired in June to renew it before it expired because driving licence test centres (DLTCs) were closed from March 26 when the lockdown was introduced and only reopened on June 1 at the earliest.

If a motorist renews their driver’s licence after it has expired, they are required to apply for a temporary driver’s licence at additional cost.

Capacity problems

However, DLTCs are only operating at 30% capacity because of the lockdown regulations. This has made it difficult for motorists to make an online booking to renew their driver’s licence.

People over the age of 60 are also being refused access to test centres because they are in the Covid-19 high-risk group.

This is despite the Road Traffic Management Corporation (RTMC) stating on the National Traffic Information System (eNatis) online booking system that people 60 and older do not have to book online; it encourages them to visit their local DLTC to be assisted.

AA requests extension

The Automobile Association (AA) this week called on the transport minister to extend the validity of driver’s licences until the end of January 2021 to accommodate those who are struggling to renew their licences.

AA spokesperson Layton Beard said it had asked for this extension because motorists always need to be on the road legally.

Beard admitted that people are experiencing difficulty booking online, and even if they have bookings, they are not being processed at DLTCs because there were massive backlogs even before the lockdown began. Plus some DLTCs are closed because of Covid-19 cases.

“Our big concern is that come the end of August going into September, October and November there are going to be a huge number of people on the roads who do not have valid driver’s licences,” he said.

“Our view is that people want to be compliant and be within the law but the current system is acting against them.

“One of the suggestions we have made is that you have to extend the validity of licences to the end of January 2021, but at the same time [we] need to be looking at outsourcing this function to third party agents, which will make it a lot easier for people to renew their licences,” he said.

Attempts to obtain comment from Ayanda Allie Paine, spokesperson for Mbalula, and national transport department media liaison officers were unsuccessful.

In 2007, then Ombudsman for Short Term Insurance Brian Martin said that should his office receive a complaint where an insurer has rejected a claim because the driver did not have a valid driver’s licence, or a vehicle was not roadworthy due to an expired licence disc, “we would not necessarily support the decision”.

“To determine an equitable outcome, we would ask the insurer to demonstrate prejudice as a result of the failure to be in possession of a valid licence,” he said.

Card format licence holders better off

However, Martin stressed there are different legal implications for drivers if they fail to convert their identity document driver’s licence to the card format, as opposed to renewing their card format licence.

If they fail to convert their identity document licence to a card licence they will no longer be deemed to be a licensed driver and will have to be retested, he said.

But Martin said the failure to renew a card licence is different, as a motorist will still be in possession of a valid licence, albeit without the required proof, and may be subject to a fine if stopped by a traffic officer for not being in possession of a valid drivers’ licence.

“However any insurance claim you may have should not be affected, as you will still be deemed to be a licensed driver,” he said.

Pamela Ramagaga, GM: Insurance Risks at the SA Insurance Association (Saia), said the non-life insurance industry would abide by the legislative extensions announced by the government and, beyond these extended dates, would make the necessary concessions on all valid claims in consideration of the Covid-19 pandemic lockdown situation.

Ramagaga said decisions on claims would therefore be based on the merits of each claim in its entirety and referred to the case precedence of the Ombudsman for Short Term Insurance ruling in 2004.

The ombud in this case ruled against an insurer and advised that the insured was a licensed driver but had omitted to comply with the formalities of renewing their licence.

Be proactive

But Ramagaga said Saia recommends that policyholders make a concerted effort to renew their licences and, where possible, “to proactively alert their brokers or insurers where their licences have expired or will expire beyond the extended periods given at law”.

“It would provide an opportunity to the insurer to note [this] in their policy profile and therefore avoid disputes when there is a claim,” she said.

Ramagaga added that should any policyholder believe their claim has been unfairly treated, Saia recommends that they first log a complaint with the respective insurer’s complaints department against any repudiation deemed unfair.

She said the policyholder should also take comfort that all valid claims would be measured against the legislative considerations of Treating Customers Fairly.

“Therefore, should the internal company processes still seem unfair, the policyholder has a right of recourse with the [ombudsman] against the merits of the claim for review.”

Credit to Money Web.