No tracker, no payout: why understanding your car's insurance policy requirements is crucial

On January 31 the Pretoria high court ruled on a motor insurance case in which an insurer had denied a policyholder’s claim after his vehicle was stolen.

According to the insurer’s rejection letter, the claim was denied because the policyholder failed to prove that, at the time of the theft, the insured vehicle was fitted with an operational tracking device. The insurer further asserted the policyholder had misrepresented the facts by stating the vehicle had an operational tracker.

While previous rulings — particularly by the FAIS Ombudsman — have addressed failures to install tracking devices, these cases involved brokers neglecting to inform policyholders of such requirements.

This case is significant, as it reinforces the necessity of adhering to policy terms and conditions. Moreover, it underscores the importance of policyholders responding honestly and promptly to insurers' requests during the claims investigation process.

The issue at hand

The insurer first argued the case involved material disputes of fact that were foreseeable and, therefore, could not be decided on the papers. Additionally, the insurer contended the policyholder had failed to comply with the policy requirement to install an operational tracking device. Last, the insurer disputed the value of the claim.

How did the matter unfold?

It was common cause between the parties that a tracking device was a compulsory requirement and failure to install one would constitute a breach of contract. In particular, such failure would be material to the policyholder’s loss. The records also indicated the policyholder had been made aware of this requirement during underwriting and had explicitly informed the insurer a tracking device had been installed.

To succeed in the claim, the policyholder needed to prove the stolen vehicle had an operational tracking device on the date of loss — November 17 2023. However, when the insurer requested proof, the policyholder failed to provide it. Instead, the insurer undertook to obtain the records itself.

In his reply, the policyholder submitted an installation certificate for the tracker. However, its admissibility, accuracy and link to the stolen vehicle were disputed. The policyholder did not address these concerns in reply. Furthermore, the tracking records he provided did not correspond to November 17 2023 and failed to specify the stolen vehicle’s registration details. As a result, the reliability of the records was placed under serious doubt.

The court’s decision

The court ruled against the policyholder, finding he had failed to prove his case. Specifically, the policyholder was unable to establish, on the balance of probabilities, that his stolen vehicle had been fitted with an operational tracking device on November 17 2023. The records he provided were dated after the incident and did not include the vehicle’s registration details.

What the case proved

The case underscores the importance of policyholders understanding and adhering to their policy requirements, as noncompliance can lead to claim rejections. It also highlights the need to ensure tracking devices, particularly in comprehensive motor insurance and theft coverage policies, are properly installed and fully operational.