Feeling hard done by or like your insurance hasn’t treated you fairly? Many South Africans are in a similar situation, often due to rejected insurance claims.
When clients get into a dispute with their insurance provider, they can approach a fair and impartial party to help resolve the issue: the NFO (The National Financial Ombud Scheme).
South African insurance policyholders can challenge a denied claim through the NFO.
This guide will give you insight into the complaint process in Mzansi’s insurance industry. We’ll explore the role of the National Financial Ombud Scheme and how to resolve insurance disputes in South Africa effectively.
TL;DR – Our version of “I’m not reading all that, *SparkNotes pls.”
- The National Financial Ombud Scheme (NFO) is a free, impartial service that helps resolve disputes between policyholders and insurers.
- NFO investigates claims rejections, poor service, and misleading policy communication and provides rulings that insurers must follow if you accept the decision, giving you a strong resolution option without court costs.
- Before going to the Ombudsman, try to resolve the issue directly with your insurance provider, following their formal complaints process.
- Gather documents such as your policy wording, correspondence records, insurer responses, and proof of financial loss to prepare your argument thoroughly.
- Communicate clearly and professionally with your insurer and the Ombudsman—stick to facts, avoid emotional language, and follow up persistently.
The Role of The National Financial Ombud Scheme
The National Financial Ombud Scheme (NFO) is an independent body that insurance policyholders can contact after they receive an unfavourable result regarding an insurance claim or any reason for dissatisfaction.
The Ombudsman’s role is to facilitate a resolution when things get ugly between you and your insurer. The Ombudsman primarily handles rejected claims, non-payment, and less-than-satisfactory service cases.
For example, clients can also escalate matters relating to misleading communication or dissatisfaction with their policy or product offering.
Clients will be happy to know that the Ombudsman’s services are free. This provides a cost-effective solution for clients who might not have the monetary means to pursue legal action against a powerful insurance corporation.
When filing a complaint with the relevant Ombudsman, you can expect a fair and impartial investigation.
Contrary to popular belief, the Ombudsman isn’t out to catch anyone out. Their main aim is to reach an amicable resolution that is just for both parties. How it works is that the NFO’s office will receive and examine information and evidence sent to them by you and your insurance provider.
From there, they’re involved in the dispute and will make a recommendation based on their findings. If the relevant Ombudsman rules in your favour as the client, and you accept their decision, the insurance provider is legally bound to comply.
How to Prepare for Filing a Complaint
So, you find yourself at odds with your insurance provider. You submit a claim, and they deny it. What now? Here’s the part where you prepare to file an insurance complaint.
When filing a complaint, you must ensure you’re prepared with a strong case. That starts with a comprehensive checklist of all the essential documents you’ll need. These include:
- Insurance policy documents
- A paper trail of the claim correspondence
- The insurance provider’s response
- Proof of financial loss (if applicable)
The policy documents will outline your insurance policy’s terms and conditions and any exclusions (what is and isn’t covered). The correspondence will include all communications between you and the insurer regarding your claim, i.e. emails, text messages (WhatsApp, SMSes, etc.) and recorded phone calls.
You’ll also need to record your insurance provider’s response; you must document their reasons if they’ve rejected your claim.
If your loss has financial implications, provide proof of economic loss, such as invoices, repair costs, or receipts.
If possible, include supporting documents like images, videos, witness statements, and a police case number to strengthen your case. Organise your information logically and create a clear, easy-to-follow, and well-structured system, demonstrating your diligence and how seriously you take the issue.
Tips for Communicating with Insurers and the Ombudsman
The best way to effectively communicate with your insurance provider and the ombudsman is to be professional yet persistent.
Avoid becoming overly emotional, using accusatory language or being argumentative, as this display could work against you. Instead of being perceived as passionate, you may be dismissed, and your credibility may be questioned.
Ensure you back up your statements with evidence and documentation.
Focus on the facts and avoid personal attacks or subjective opinions. Clearly outline your case, identifying the core issue you are debating, using specific details about the claim, the policy’s terms and the insurance provider’s response to your claim.
Lastly, don’t hesitate to follow up with your insurer and the ombudsman regarding the status of your case.
Keep track of all the responses, feedback, and deadlines communicated to you. If no information is provided to you, inquire politely yet firmly, for example: “I hope this email finds you before I do…” Just kidding. What you should do is maintain a record of your attempts to follow up and communicate with each party.
Step-by-Step Guide to Resolving Insurance Disputes
Despite your best efforts and carefully submitted claim, you find yourself in front of the NFO. Should you ever find yourself in this situation, here’s a step-by-step process detailing how to resolve insurance disputes in South Africa:
- Step 1 – Contact Your Insurance Provider First
As a first step, contact your insurance provider directly via email, phone, or WhatsApp. Clearly state your problem and provide all relevant details and documents. If possible, ask for a written response, which can later serve as invaluable evidence.
- Step 2 – Submit a Formal Complaint to Your Insurer
If communicating with the insurer directly gets you nowhere, follow your insurance provider’s official complaints process. Submit your complaint in writing, detailing the issue and providing supporting documents to create a paper trail. This will prove that you followed all the necessary steps and cooperated with the insurer to reach a satisfactory resolution.
- Step 3 – Gather Supporting Evidence
On top of the evidence you’ve already gathered and presented to your insurance provider, collect additional information to strengthen your case. Documents can include your insurance policy document, claims record, and correspondence with a representative from your insurance provider. Ensure you keep a timeline of events, highlighting important dates and actions you took in resolving the issue.
- Step 4 – Escalate to the National Financial Ombud Scheme
If, after all that, your complaint still isn’t resolved within a respectable time frame, it may be time to rope in the National Financial Ombud Scheme. The NFO is an independent body specialising in resolving disputes between insurance providers and their clientele. Escalate your issue to the ombudsman with proof detailing the problem, your insurer’s response and your attempts to resolve the matter before bringing it to the attention of the NFO.
- Step 5 – Understanding the Ombudsman’s Process
To avoid confusion or frustration, familiarise yourself with the Ombudsman’s official complaints resolution process. The NFO will examine the information and evidence sent to them by you and the insurer. From there, they will make a recommendation based on their findings. The NFO’s process may involve the following steps:
- Phase 1: Investigation. Here, the NFO reviews your case and may request additional information from both parties.
- Phase 2: Mediation. The NFO may try to resolve the dispute amicably, seeking a satisfactory outcome for all parties involved.
- Phase 3: Outcome. If mediation fails, the Ombudsman issues a final ruling, binding the insurer if you accept it, though you’re free to pursue other options if unsatisfied.
- Step 6 – Consider Legal Action (As a Last Resort).
If you’re unhappy with the outcome of the case and the Ombudsman’s decision, you can pursue legal action. Mediation, arbitration or Small Claims Court (SCC) (they handle civil disputes that involve amounts up to R20 000) can assist in getting you legal recourse. A quick word of advice: consult a legal professional before taking legal action; the last thing you want is to spend thousands of rands and precious time on a case you would have a hard time winning.
Legal Options for Unresolved Disputes
While extreme and only as a last resort, taking legal action against an insurance provider after the Ombudsman’s ruling is an option.
Mediation is an alternative dispute resolution method that is less formal than traditional court cases. This option is also more budget-friendly than the average court proceeding. On rare occasions, clients can also pursue arbitration for more extreme cases. Arbitration is when the parties involved in a dispute agree to have their case decided by an impartial arbitrator or panel instead of going to court.
These two methods involve third-party mediators facilitating a settlement between you and the insurance provider.
There’s also the small claims court (SCC) option, which aims to resolve minor civil disputes involving amounts up to R20,000.00.
In South Africa, the SCC provides a simplified and accessible avenue for conflict resolution. The Small Claims Court is designed to be informal and less intimidating than traditional courts, which allows you to present your case without a legal representative.
But, for more complex or high-value, a.k.a expensive, cases, you can consider a civil lawsuit.
As a policyholder, you can sue your insurance provider for failing to honour their contractual obligations outlined in your official insurance policy document. Should the court rule in your favour, the insurer will be liable for the damages, subject to your policy’s limits.
Unlike the SCC, a civil lawsuit is formal and requires legal representation. While you can choose to forego legal representation and be your own lawyer, be sure to consider the potential pitfalls:
- Misunderstanding the law and legal jargon,
- Dealing with a complicated case that requires legal expertise,
- The court may order you to pay the opposing party’s legal fees if the ruling is against you.
Whichever path you choose, ensure you’re not walking alone. Professional legal counselling can guide you on the most appropriate course of action. A qualified legal professional will consider your specific circumstance and may provide helpful insight and advice.
How to Prevent Insurance Disputes in the Future
You’re hoping never to find yourself in hot water with your insurance provider, and that’s so valid.
To minimise the likelihood of insurance disputes, take the time to understand your policy documents, especially before you take up cover.
Please read the policy wording carefully to understand. If any insurance jargon (big words) confuses you, ask a consultant or customer care agent to explain the meaning and implications.
Similarly, you should keep up with changes to your insurance agreement. Policies aren’t set in stone, so regularly review your policy document for any updates or amendments to your insurance coverage.
Finally, choose the right insurer.
We’re not saying there will be no disputes. But, a reputable insurance provider will have transparent processes, a solid customer service history, and a proven track record of settling claims fairly and quickly.
A reliable insurance provider will likely communicate clearly, address your concerns carefully, and handle claims efficiently. This means there’s less chance of the misunderstanding spiralling into an even bigger fight that needs to be handled at the Ombudman’s office.
Conclusion
Insurance disputes aren’t anyone’s idea of a fun time. But there is a chance that at some point in your insurance journey, you might have to experience it.
Knowing your rights and available options can help empower you, especially regarding the National Financial Ombud Scheme.
The correct information, some professional advice and some intentional organisation can help make dealing with your insurer and the Ombudsman a little less stressful. From dealing with your insurance provider to potentially seeking legal action, you have the right to address any unfair treatment.
That’s to say, you never have to get ready when you stay ready.
All in all, transparency and customer support are paramount in the insurance landscape. That’s why having an insurance provider who lives by these principles is crucial.
Pineapple is an insurance provider that values clear communication, fair practices, and a commitment to resolving disputes in your best interest. And we haven’t even told you the best part: our comprehensive car insurance is affordable, starting from R570 per month for total vehicle protection.
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Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.
Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply.
