Doctor scores payback from insurance broker after Land Cruiser theft

Five years ago a Brits doctor’s R311,000 insurance claim for her stolen SUV was rejected by her insurer on the grounds that she’d failed to have a specific tracking device installed in the luxury vehicle. But now the broker who was found to be responsible for her loss has been ordered to pay her the money.

Soon after her insurer — Quicksure, underwritten by Old Mutual — rejected the claim for her stolen Land Cruiser, Dr Luzanne de Beer lodged a complaint with the ombudsman for short-term insurance. But the ombud’s office sided with the insurer.

Then she filed a complaint against her broker — Badie Jacobs Insurance Brokers of Brits — with the Financial Advisory and Intermediary Services (Fais) ombud, saying the broker failed to inform her the insurer made a specific form of tracking equipment a condition of cover. That ombud recently found in her favour, ordering Badie Jacobs Insurance Brokers to repay De Beer R301,466 — the claim amount minus an R11,000 excess payment.

De Beer bought the Land Cruiser in February 2016 and added it to her Quicksure insurance policy obtained through her broker. In July 2018 the vehicle was stolen from her place of work.

The broker denied liability, saying De Beer signed the policy documents after it was explained to her that a satellite early warning device had to be fitted and she signed without giving attention to the contract and the accompanying disclosure document.

In his determination, dated December 11 2023, ombud John Simpson said an early warning satellite tracking device was not a normal or usual requirement in a policy for theft cover on all vehicles, generally only being applicable to certain vehicles, depending on their value and “exceptional risk factors”.

The broker claimed this requirement had been discussed with De Beer, but, Simpson said, no evidence of that had been produced.

“There is no record of advice reflecting any discussion with the complainant regarding the satellite tracking device and there is no evidence of the respondent following up with the complainant to confirm whether a device was installed.”

All the broker submitted was a general letter sent to its clients and the policy schedule sent to De Beer at the inception of the policy.

The general code of conduct for authorised financial services providers and representatives places a duty on financial services providers to disclose material terms of the contract.

“The respondent appears to regard itself as a mere conduit or postbox for the complainant’s transaction with the insurer, but as per the code, its duties and responsibilities extend far beyond that.”

As an expert in the field, the broker was expected to provide all the information and assistance necessary to ensure that De Beer was well advised and informed regarding a special condition such as an early warning satellite tracking device, Simpson said.

A broker would also be expected to follow up regularly to check whether the device was installed and to send proof of the installation to the insurer.

“Sending a general letter to its clients and the policy schedule to the complainant does not satisfy the requirements in terms of the code.”

Had Badie Jacobs Insurance Brokers complied with its duties, there was a high probability that De Beer would have installed the device and her claim would have been successful, the ombud said. Hence the broker was ordered to pay De Beer R301,466, plus interest at a rate of 11.75% per annum from the date of the determination to the date of final payment.

• If you believe you have been financially prejudiced because of financial service rendered to you in respect of a regulated financial product, you can visit the Fais ombud’s complaints portal at www.faisombud.co.za and select “lodge complaint”.

GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail consumer@knowler.co.za or on X (Twitter) @wendyknowler.