Insurer does U-turn in blame game

When Howard Lilenstein had a crash the insurance company applied their usual 80/20% rule claiming that he was 20% to blame even though the woman who drove into him admitted she was completely at fault.

The Plumstead resident said he always reads Off My Trolley but the one about Trevor Gain who was upset when OUTsurance applied the 80/20% rule was more personal for him (“No gain for driver without insurance”, Off My Trolley, May 3.)

“The 80/20% apportionment is reasonable on occasions, but I’m sure insurance companies often use it as a cop-out. A few months ago a woman drove straight through a stop street and into the side of my Nissan van. She acknowledged in writing that the matter was entirely her fault,” said Mr Lilenstein, who is insured with OUTsurance.

Although he reported the crash to OUTsurance, he didn’t claim as he didn’t want to lose his no-claim bonus so he instituted a third party claim with Dial Direct, the woman’s insurer.

Dial Direct first offered Mr Lilenstein a 60/40% settlement which he refused. Then the next day he was offered an 80/20% settlement.

“They also based the settlement on some arbitrary substantially lower figure (R9 867) than the two quotes (R11 716 being the lowest of the two) I was asked to get. I immediately asked for clarification on the reduced amount (R9 867) and the consultant was clearly out of her depth in trying to explain why Dial Direct reduced the amount after the fact. She referred me to the assessor at Telesure but he hasn’t yet replied to my email.

“When I told the woman who drove into me of the status of the claim, she was so appalled she offered to pay the shortfall.

“This doesn’t seem right as that’s what she has insurance for. I was going to take it to the Ombudsman for Short-term Insurance but it makes we wonder if it’s worth the effort,” said Mr Lilenstein, who explained that he was beyond the stop line at the corner of Woodgate and Southfield roads, Plumstead, when the woman, who afterwards said she was in an emotional state, drove through without stopping at the stop street and crashed into him.

The woman told Mr Lilenstein: “I’m sorry that this situation is being made so difficult for you – I would be happy to state to anyone that I was completely at fault and there was nothing you could do to avoid the collision.”

Dial Direct asked Mr Lilenstein to get two quotes. Their computer system was reportedly offline so they couldn’t find the nearest assessment centre to Plumstead.

“Due to the long wait and the fact that they pay out instead of fixing it, I had the vehicle repaired,” said Mr Lilenstein, who needs the van for his business, delivering a range of health confectionary to specialist stores, sports shops and some supermarkets across the peninsula.

I asked Dial Direct for an explanation and why, when the woman admitted she was completely responsible for the crash, they still applied the 80/20% rule.

They didn’t really explain but it “was in line with relevant case law”.

Warwick Scott-Rodger, head of Dial Direct Insurance, confirmed that their client submitted a claim for a motor vehicle accident after she collided with Mr Lilenstein’s Nissan NP 200 at the intersection.

“Our client’s vehicle was not damaged and she was notifying us for third party claim purposes.

“Mr Lilenstein submitted a claim to Dial Direct under our customer’s policy and he provided the necessary documentation. The claim was processed and finalised and it was reviewed in line with the relevant case law. The third party (Mr Lilenstein) was made an initial settlement offer, which was subsequently amended to 80% of the total repair costs of the vehicle but he declined the offer,” Mr Scott-Rodger said.

“When we received your correspondence we reviewed the claim. The 80% settlement offer was made in accordance with the principles applied within the short-term insurance industry, and case law.

“However, to bring the matter to an amicable resolution and given that the proportional deduction is relatively small, we decided to pay Mr Lilenstein in full according to the repair quotation.

“We are merely helping Mr Lilenstein, as the proportional settlement previously communicated is correct in law.

“We will contact Mr Lilenstein to finalise the settlement,” Mr Scott-Rodger said.

Which Dial Direct did. And two days later the money was deposited in to Mr Lilenstein’s bank account.

“Fantastic, well done and thanks again,” Mr Lilenstein said.

Peter Nkhuna, senior assistant ombudsman at the Short-term Insurance Ombudsman (OSTI), said their office does not deal with liability claims (the apportionment of damages).

“We do not deal with liability disputes. I can, however, confirm that the apportionment of damages or liability is an accepted practice and is both endorsed by the courts and also authorised in terms of the Apportionment of Damages Act No. 58 of 1971,” Mr Nkhuna said.

“Insurers also accordingly argue and make offers of settlement based on the same principle that most accidents will not be caused by exclusively the one party, but a contribution on the part of each party to the accident,” he said.