IFSO Case Study

An insured held insurance on his contents and vehicle. 

In July 2018, a sequence of events started, which included the taking of the vehicle, and a number of burglaries of the contents. 

The client reported the loss to the police and made claims to the insurer for the loss. The insurer originally declined the claim on the basis that the insured had provided false or inconsistent statements, meaning that he had not been able to show that the loss occurred, particularly in the way he described it. 

Therefore, the insurer declined the claim as outside the scope of cover provided by the policy. Alternatively, it relied on a breach of the honesty conditions to decline the claim. 

The client disputed the decision, on the basis that he had not made false or inconsistent statements. 

He also raised concerns about the investigator’s conduct.

The case manager’s assessment 

When making a claim under an insurance policy, the initial onus is on the insured to establish that he/she has suffered a loss, which is covered by the policy. 

This is known as a prima facie claim.

 If the prima facie claim is established, then the insurer is entitled to raise an objection to meeting the claim. However, if the insurer wishes to rely on an exclusion in the policy, the onus is on it to establish the application of the exclusion. 

The case manager reviewed the client’s statements and discussed the situation with the insurer. The case manager believed that the underlying sequence of events he described, when this was analysed, was not materially different. 

The client clearly had difficulty providing information in a structured way and mixed the timeline of events. However, overall, his information was not inconsistent. The case manager also noted that even if there were inconsistencies, given the client’s health, the insurer might also
have difficulty showing any dishonest intent on his part. In addition, the client reported the loss to police, and the vehicle ownership had been changed. 

Therefore, the case manager was concerned that the insured had not made false statements and there was sufficient information to show a prima facie claim. Following discussions with the case manager, the insurer accepted that he did not make false statements and had proven that the vehicle and some of the contents were stolen. The insurer agreed to accept the claim and settle with the client directly.

Sept 2019

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