The Rise in Rejected Insurance Claims – What It Means for You 

The Rise in Rejected Insurance Claims – What It Means for You

At PW Harvey, we make it our mission to ensure clients not only have the right cover in place but also understand how to protect their financial well-being when things go wrong. Unfortunately, we’ve noticed a growing and worrying trend in South Africa: more and more insurance claims are being rejected, and often for reasons policyholders weren’t even aware of. 

A recent article by Daily Investor highlights just how widespread this problem has become. Across both short-term and life insurance sectors, claims are being turned down at an increasing rate. Whether it’s vehicle accidents, home repairs, or life cover claims, insurers are clamping down on policy conditions – and they’re doing so with good reason: policies are contracts. And like any contract, they come with terms and responsibilities. 

The most common reason for rejection? Failure to take what insurers call “reasonable precautions.” For example, if a vehicle hasn’t been serviced according to the manufacturer’s schedule, or if a house has damage that was left unrepaired and eventually worsened, an insurer may argue that the client didn’t uphold their side of the agreement. As a result, even valid claims may be turned down. 

Another red flag is the use of a vehicle in a way not declared to the insurer. If you’ve told your insurer your car is used for personal errands but you’re actually using it for business or deliveries, that’s considered a material misrepresentation – and it can void your claim entirely. The same goes for unlicensed or intoxicated drivers. In fact, many vehicle accident claims are now being investigated using telematics and reconstruction reports to determine whether the driver was speeding, reckless, or negligent. 

Life insurance is not exempt either. Recently, a high-profile case made headlines where a R6 million life insurance claim was denied after the deceased had overstated her income and failed to disclose an existing policy with another insurer. Despite the payout amount being substantial, the insurer successfully challenged the claim in court on the grounds of material non-disclosure. While tragic, the ruling reinforced a simple truth: honesty and full disclosure are non-negotiable in insurance. 

In 2023 alone, South African life insurers rejected around 38,000 claims – roughly 4.1% of all claims submitted. The reasons ranged from fraud and misrepresentation to unpaid premiums and unmet waiting periods. What’s most concerning is that many of these rejections could have been avoided with better understanding and communication. 

At PW Harvey, we believe insurance should be a shield, not a gamble. That’s why we work closely with our clients to regularly review cover, ensure disclosure is accurate, and explain the fine print in clear, practical terms. We also encourage our clients to maintain good records, perform regular maintenance, and ask questions before making changes to their lifestyle or finances that might impact their risk profile. 

The current climate is a wake-up call for all South Africans. The assumption that “I’m covered” can be dangerously misleading if you don’t fully understand what your policy expects of you. Insurers are becoming stricter – but not unfairly so. They are holding clients accountable for the details we often overlook, such as keeping up with payments, ensuring assets are maintained, and providing full and honest information when taking out cover. 

Insurance is not just about paying premiums. It’s about partnership – a mutual understanding between you and your insurer. And with the right advisor in your corner, you can ensure that when the unexpected happens, your cover works as it should. 

If you have any concerns about your current policies or want peace of mind that your cover is in order, speak to a PW Harvey advisor today. We’re here to help you avoid nasty surprises – and to make sure that in your time of need, your claim isn’t just submitted… it’s paid.